Possessionary Title

Macdormer

I am in the process of buying a house and have now been advised that the title deeds have been lost. The sellers (a firm of solicitors) have taken statements from neighbours to witness that the former tennant (now deceased) has lived there since 1953 and that she was the owner. The property has not been registered by this lady or her husband who died in 1960.
I was really looking forward to making this my home and now I am devasted. I have been told that I can have possessionary title with an indeminity insurance and after 12 years I will be able to apply for full title deeds, but I am 62 years old and not in great health.

Would there be problems selling this property should I or my family need to sell at a later date? Should I walk away from it now?

poppysarah

Sounds like way too much hassle.

Are there no other less hassley houses for sale?

yakface77

Just cut and pasted this from questions and answers on tinternet.:-)

If you have lost your house deeds all is not lost. You can apply to the Land Registry for voluntary registration so that deeds are not required to sell the house. The Registry would require you to answer quite a lot of questions to reconstruct as far as possible the content of the deeds. Once registered your title would be listed as possessory only, but this can be updated after no more than 12 years and this would not necessarily affect the sale of the house.

Obviously the process might be quite complicated. I would talk to a solicitor ASAP.

Personally i would proceed, as many would be put off from buying due to this, there is nothing sinister or dodgy about it either, if there is then you are covered with the insurance. :-)
Use this defective title to your advantage and get it cheaper.

I purchased a property for £30k this year, it had been on the market for £130k for 5 years, had 7 offers which were accepted, all were put off by the fact the title deeds had been lost. (its not a problem, especially with insurance)

GO FOR IT !!! AND GET IT CHEAPER

Doozergirl

It's really not that much of an issue. If they lived there for that long, it's hardly likely that some one else is going to appear and say that they own the property. If they did, then that is what the insurance is there for - to protect you. If a property hasn't changed hands in a very long time then it's unlikely to have been registered - it doesn't mean they didn't own it. And if you lived in a house for 53 years, it's entirely possible that the deeds might get lost.

Really, if your solicitor isn't being clear then ask them what they would do if they were you. I don't think it's much to worry about. I am sure that possessory title does actually give them/you ownership - if someone did turn up claiming to own the land I don't think they'd actually be able to take it from you anyway once possessory title has been given to someone else. The further 12 years to absolute title is more of a formality.

Macdormer

Thank you so much for your help!

I offered full asking price of £170.000 as I wanted to secure the property, (the location is ideal for my needs). This of course was before I found out about lost deeds. I would need to spend at least £30.000 as it needs total modernisation and central heating etc. Adding my offer to estimated expenditure then I would be getting the property at about £20,000 below the market value.

After reading your response re: 'a property on the market for 5 years with 7 offers that did not go through because of only having possessionary title'. Would you recommend reducing my offer? The price I offered was roughly £5-10,000 less than I would have paid for a similar property in need of modernisation but WITH title deeds.

yakface77

Sorry about late reply,
Yes personally i would massively reduce offer, do not worry about offending either. You could tell the EA that you may also have to quickly sell after only a short time in the house, therefore th eprice needs to demonstrate 'quick sale' its amazing that people are so put off by purchasing due to these 'grey areas', they are just simple technicalities.
I think that you should consider £150k offer, due to this reason. Its your call :-)

G_M

The sellers (a firm of solicitors)

I assume you mean the solicitors acting for the seller? Who is....?

the former tennant (now deceased) has lived there since 1953 and that she was the owner.

Was this lady a tenant or the owner?

I would get your own solicitor to do a lot more digging before progressing.

Macdormer

Thanks once again.
I have carried out a 'survey' asking about 10 people would they purchase a property being sold with possessory title and indeminity insurance... all have said 'would not touch it'. I am surprised at this response ...

I am confident that this property was owned by the previous resident now deceased... there have been declarations from other neighbours provided plus evidence in rates bills (council tax) electoral register ... all this information still has not pursuaded anyone to change their response... therefore if I bought the property it is unlikely I will be able to sell easily ..thats for sure! So I will offer £150,000 as you recommend. Fingers crossed I still get it and they are not offended by the offer. I will post the outcome (should know within a week).

I really think property shows should raise this issue so that the general public are more informed about the benefits and pitfalls.

Doozergirl

Possessory title does change to absolute title so it would depend upon when you sold.

True that most people don't even begin to understand what possessory title really means so you'd expect them to steer clear. The opportunity for a better price is there.

Richard_Webster

You need to have your solicitor check the background history, but I agree with Doozer's approach - it usually isn't that much of an issue and you can get indemnity insurance. The price reduction point is rather overrated. If I was satisfied as to the history then I wouldn't have a problem buying such a property.

People out there could get worried about the point without understanding what was involved. In 99.5% of cases you will sit out the 12 years and virtually automatically get an absolute when you apply for it.

Macdormer

I shall of course discuss with my solicitor; but now thanks to you all I am armed the right questions and a little more understanding.

My sincere appreciation and kindest regards.