Buying a House with lost titel deeds

tghornby

HELP! We are in the process of buying a house, however, the title deeds have been lost we were told by the solicitor. The property has not been registered with the Land Registry as it was purchased before it was compulsory to register properties. Our solicitor has advised us that vendor will have to produce evidence and a statutory declaration trying to prove their ownership of the house. They will then need to register for a 'possessory' title. The vendors would then have to take out an indemnity policy. I 'think' I understand all of this, HOWEVER, I still feel 'uneasy' about buying a house without deeds. From what I understand after 12 years!!! we cound then contact the LR and make the title absolute in our own names.

1. Should I feel uneasy about this?
2. I feel this would affect the salability of the house should we sell before the 12 year point?
3. Could it be a bargaining tool to reduce the price of the house? if so to what degree?

Many thanks for any advice regarding this matter! confused.:(

Johnhowell

I think the 12 year rule is for adverse possession, and the law was changed - Any adverse possession has to now be registered AS it starts not after some period.

I would guess your situation is not adverse possession.

You would gain title at the point of exchange - albeit within the rules of "lost deeds" situation. Speak to your solicitor. If they have no experience of this type of conveyance ask if they could refer you to someone that does. Hope Richard Webster can help here.

Good luck, let us know how it goes,
John

justjohn

1. NO...however make the vendor think you are worried.
2. yes , if the person does not understand indemnity policy / lost deeds
3. LOL depends on the degree the vendor understands the indemnity policy. i assume you are in england. The situation is common place with old properties(in scotland) that have not changed hands for a long while.

I would expect a discount as its extra hassle. How much discount you can demand is anyones guess.

Will all depend on how they understand what is happening and how desperate they are to sell.

tghornby

Thanks for the advice. I have expressed my 'concerns' to the Vendors Estate Agent and once we have a clearer picture of what evidence can be produced I hopefully I will feel a little easier. I just don't like the "12 year" thing!

thanks again.

justjohn

indemnity policy - more or less and insurance policy.

The policy will be issued and will probibly be based on affidavit from current owners and any previous.

This will probably be the evidence they use to gain the policy.

If the current sellers do not own the property and the rightfull owner comes out the woodwork at a later date the policy will pay out.

Cost of the policy will be based on the risk factor.
During conveyancing and issue of policy conveyincing solicitor and the policy issuer will make sure there is no evidence that the property belongs to someone else.

I assume either the property has been in the current family for 50-100 years or the last time it was sold it had an indemnity policy(if the latter then should not be the 12 years to sort deeds) or previous sollicitor messed up on the deeds after last sale.

My assumptions are based on scottish LR but english should not be much different.

Its no bid deal ....but can be used as leverage.(there are many of these issued and i have never seen any info on claims or cases were pllicy has been claimed on.)

btw MORTGAGE PROVIDERS DO NOT NORMALLY BAT AN EYELID AT THESE POLICIES. Wich surprised me first time i heard of this sittuation.

tghornby

Hi Just John

The house is in rural wales and the current owner has had it for approx 27 yrs (Prior to compulsory registration with the LR). The deeds were plaed with a solictor for safe keeping, I believe, but these have been lost by the solicitors. So presume the 12 year issue will stand.

thanks

justjohn

yes probably.

Still a hassle. the indemnity policy will be taken out for the 12 year. Should be indexed linked.
Your solicitor should sort it all out with the selling solicitor.

Are you going too re-negotiate price?

tghornby

I think we should try and renegotiate the price but am unsure how much we could expect to reduce the price by. I would think if we pulled out of the sale, surely the situatin with the deeds could put off prospective buyers and if we are to proceed, this could be the case for any prospective buyers if we sell within 12 years.

justjohn

tghornby wrote: »

I think we should try and renegotiate the price but am unsure how much we could expect to reduce the price by. I would think if we pulled out of the sale, surely the situatin with the deeds could put off prospective buyers and if we are to proceed, this could be the case for any prospective buyers if we sell within 12 years.

yes, but that all depends on the depth of understanding of the purchaser/prospective buyer.

for instance it would not put me off buying.

in a nutshell all the indemnity policy means is the is a teeny chance someone comming out of the woodwork at a later date and demanding there house back(the rigtfull deed/owner of the house). In which case you would get your money back.

The policy is not given out by either the underwriter or the solicitor on a whim.

However people not in the know panic. It sounds a bid scary...until you look into it. It just a hassle like dpc or woodworm/ a bad survey etc lol

Just depends wether you want to use it too your advantage, as far as i am concerned its buisness. I would take advantage.

As for how much you can get of the price depends on how paniced the seller is and how well the solicitor has explained it to the seller.

The thing is its worth something off, as its not the norm....As it is the vendor will be paying around 400 quid for the 12 year policy.

All depends on how much you want it and how desperate they want to sell.

If i was selling it to you, i would not give you a discount lol

Ask your solicitor some are good, some will think its a bit unethical.

timmyt

you may well get absolute title albeit with an entry to say the proeprty may be affected by unknown covenants etc. that is fine if you have no building plans - though getting a copy of any deeds of next door would help to highlight what could be missing. is there not even a photocopy of the deeds anywhere.

it is truely amazing how many people if they got a knock on the door from someone who said 'you have 30 seconds to prove you own this house or I blow it up' would not be able to show anything as proof. Get yourself a copy (frame it for goodness sake) of your registered title and plan, or conveyance into your name at least.

actually if you have unregistered deeds, get them registeed plain and simple.

martindow

timmyt wrote: »

it is truely amazing how many people if they got a knock on the door from someone who said 'you have 30 seconds to prove you own this house or I blow it up' would not be able to show anything as proof.

It doesn't seem that amazing to me. We don't often have people coming to houses around here bombing houses with 30 seconds notice.

You must live in a rough area Timmy!