Land Registry questions

charlibish wrote: »

Hi,
I have had my mortgage for 17 years and am in the middle of remortgaging with another lender. The conveyancing company they use is trying to make me take out an indemnity policy on my leesehold. They are saying:

"Following our initial title check, it has come to light your property is registered as Good Leasehold a copy of which is enclosed. Good Leasehold titles are normally granted where, for some reason, the Land Owner that originally applied for registration was unable to produce to the Land Registry, sufficient evidence to enable the Land Registry to register the Land with what is known as Absolute title. Absolute title is the class of title that your Mortgage Lender, first direct, requires. Can you please advise if you already have an indemnity insurance policy in relation to this defect, in which case please could you send us a copy? In the event you do not hold a policy we can obtain a quotation for the Indemnity insurance from First Title insurance to protect you and the lender’s interest."

"You should have been provided one when you purchased your property as the property is not registered as Title Absolute which is what the majority of lenders require the the property to be in order to lend monies on them. It is a First Direct requirement that an indemnity policy must be put in place if the property be Good Leasehold."

I do not understand what any of this means or what this policy is for. Do I really need one? What is it insuring me against? I am getting no answers from this conveyancing company and feel like they are trying to make me buy something I don't need.

Any info will be appreciated. Thanks.

Good, rather than Absolute, Leasehold title can be granted for a few reasons. The most common being that was what was applied for at the time of first registration and the applicant was unable to prove conclusively that the person(s) who granted the lease owned the freehold title. In essence they lacked evidence to confirm categorically that the landlord was able to grant the lease.

It's unlikely to have been an issue re your own seller when you bought as I suspect the title was already granted.

As posted it is insuring you (and the lender) against the risk that someone might come along and prove that the landlord had nor ight to grant the lease as they did not own the land and building. That risk may be very small but it exists so a lender will invariably wish to insure against it.

Have you checked to see if the freehold is now registered? Sometimes the freehold will be registered after all the lease has been granted as for example it changes hands and that triggers the need to register. I suspect it isn't as the conveyancer/lender may have checked but still worth confirming.

You could also look to try and identify who owns the freehold now BUT it's important to consider that carefully as any effort to do so might pse a problem for you getting an insurance policy. In essence your searching for the freeholder increases the risk of someone coming forward who isn't the one who granted the lease - extreme possibility but again a real risk to consider.

If the freehold is unregistered and ther eis no clue as to who owns it now and no prospect of resolving that aspect then it may be worth taking the indemnity insurance. It can be quite a small cost in the bigger scheme of things but again something your conveyancer should be able to confirm for you.

AlexMac wrote: »

Dear L R rep!

Your earlier reply ...


...prompts me to ask a similar question.

Friends are desperate to move to our street but houses rarely come to market.

The one which is now on sale is ideal; but far too big, as it is a conversion of an existing double-fronted coach house with a large garden and over 20 metres of frontage on to our street, a former Mews.

So they wonder whether they can buy it, appoint an architect and secure planning permission to convert or develop (which won't be a problem given the street frontage and many local precedents) then sell half, or less than half of the plot, undeveloped, as site for the buyer to build on.

The question is, given that they would hope to sell part of an existing building, whether they could separate the title without actually demolishing the part they don't want? In other words, can you draw an arbitrary line through the building and its rear garden, then parcel that up as a discrete rectangular plot, if there is not yet any obvious physical separation ?

The ideal outcome would be to end up with two, separate detached properties; theirs based on the existing one, a second, separate, smaller new-build on the released plot after demolition of that portion. A fall-back would be to have a semi-detached solution by securing permissions based on retaining but extending the existing building. In this latter case the separation would necessarily follow the line of one of the structural party walls.

They're not phased by the engineering or demolition challenges (he was a civil engineer) but not sure whether you can sell a newly created title to part of an existing structure with a view to later, physical separation?

You can sell any part of a registered title if the buyer is happy with the terms and defined split. The devil would be in the detail so if you split along structural lines and then removed the structure you need to be clear as to where the boundary then exists.

See our PG 40 sup 2 re plans for leases/transfers of part for an idea of the quality of plan we would need. The buyer may want more depending on the devilish detail of course

Barter wrote: »

Hi LR rep,

I'm selling an unregistered house after 45 years of living in it.
It has a very small flying freehold (c.3% of the total area) which has never been an issue. I think the previous owner made a declaration in the deeds to that effect when she sold.
The buyers' solicitor now wants me to pay for indemnity insurance. I am trying to find out whether this is a condition of their lender.
But if not, is it essential from the Land Registry side, or just preferable for the buyers? (and, if anyone knows, who should pay for it?)
Many thanks.

Indemnity is usually sought to cover against the risk of somethign happenign to disprove a 'claim' against or weakness/defect in the title. It reads as if they are happy to buy and then register but only if you insure against the risk of them not getting absolute title for example.

In cases of doubt nowadays a buyer will often ask the seller to register the title first and then consider the risk, if any remains.

Who pays the cost is a matter for seller/buyer to resolve in the same way the sale/purchase price is often negotiated up ro down. There's no right answer to the who pays Q