Indemnity Insurance?

milliebear00001

Hi there

Viewed a house recently where the back garden (a small patio) doesn't actually 'belong' to the property. It is a sectioned off bit of the communal garden, which is owned by one of the houses in the row. The vendor said they have indemnity insurance for this, and that they had had no issues with the land in the three years they had lived there (apparently the land has been sectioned off for at least 13 years).

My question though, is what is the indemnity insurance covering against, and how would this impact on me as a potential buyer?

Bananamana

Indemnity will most likely cover the loss in value should the owner take back possession of the land.

If it's owned by one of the other houses in the row is there any reason why it couldn't just be transferred over?

justjohn

indemnity insurance - will be to cover you for loss if someone claims it. Its common practice with nacked up deeds. If after ten years it often expires and property can be registered properly with land registry and deeds changed and updated if no one objects.


However LOL they are often a cop out, as it can often be sorted with affidavits from the previous owners from the last ten years. And neighbours as a last resort. English law and scottish are slightly different.

Idemnity is a last resort, but there is nothing wrong with this kind of policy.

justjohn

justjohn wrote: »

indemnity insurance - will be to cover you for loss if someone claims it. Its common practice with nacked up deeds. If after ten years it often expires and property can be registered properly with land registry and deeds changed and updated if no one objects.


However LOL they are often a cop out, as it can often be sorted with affidavits from the previous owners from the last ten years. And neighbours as a last resort. English law and scottish are slightly different.

Idemnity is a last resort, but there is nothing wrong with this kind of policy.

The deeds of all properties concerned should been seen, in my oppinion. As any property you buy should have good title.

Eg. If the deeds of the original owner of the land has your portion on there deeds and can take possesion of the land. Then they have 100% rite to take legal title.

if however there deeds do not have/do have your portion of land on it and you can keep possesion of it for 10 years then you will be entitle to take full legal title.

Bananamana

justjohn wrote: »

The deeds of all properties concerned should been seen, in my oppinion. As any property you buy should have good title.

Eg. If the deeds of the original owner of the land has your portion on there deeds and can take possesion of the land. Then they have 100% rite to take legal title.

if however there deeds do not have/do have your portion of land on it and you can keep possesion of it for 10 years then you will be entitle to take full legal title.

Not quite correct.

In the first situation - i.e. if the land is registered to another owner, you are much better agreeing the transfer over. It will save a lot of hassle and fees.

Adverse possession or "squatters rights" lets you apply for a possessary title of the land (what john is discussing). The Land Registry then serves notice on the owner who can make objections. It can then lead to court if the parties cannot agree a way forward.

If the land in question is not registered, the latter position, then yes after 10 years you can apply for adverse possession and the Land registry will grant possessary title. This would generally be protected by indemnity.

After a further period of 12 years you can apply to upgrade the title to absolute (best class of title).

justjohn

scottish law and english is different.

I only know the scottish side as my neighbour tried gain land rather than just access.

english or scottish law all deeds concerned should be examined a good solicitor if he is on the ball should do this anyway. as it is possible deeds will marry up or as the case may be not and it should be atempted to sort the problem.

lindos90

We had a similar problem when we bought our first house, the vendors solicitor drew up a letter that the vendor signed, stating they had over 10 years uninterupted and undisputed use of the garden. In this case it was not possible to find out the actual owner of the land. When we came to sell, we provided a copy of that letter, plus a declaration of our own to the same effect, also the buyers solicitor asked us the buy an indemnity policy as 'belt and braces'. It might be worth confirming how long your seller has used the land for.

justjohn

Bananamana wrote: »

Not quite correct.

In the first situation - i.e. if the land is registered to another owner, you are much better agreeing the transfer over. It will save a lot of hassle and fees.

Adverse possession or "squatters rights" lets you apply for a possessary title of the land (what john is discussing). The Land Registry then serves notice on the owner who can make objections. It can then lead to court if the parties cannot agree a way forward.

If the land in question is not registered, the latter position, then yes after 10 years you can apply for adverse possession and the Land registry will grant possessary title. This would generally be protected by indemnity.

After a further period of 12 years you can apply to upgrade the title to absolute (best class of title).

I believe from what i have read(elsewere) that this scenario in law is more or less based on squatters rites in england. We do not have that in scotland.

Bananamana

justjohn wrote: »

I believe from what i have read(elsewere) that this scenario in law is more or less based on squatters rites in england. We do not have that in scotland.

Correct- I would not know the position in Scotland