limited title guarantee

Grimbal

We are now at the point of exchange of contracts on a property where the vendor has died. On the contract after title guarantee, it states "limited title".

After googling this, I found:


"The guarantee a seller gives to a buyer where the seller has limited knowledge of the property that they are selling and therefore cannot give an unqualified guarantee (full title guarantee) that the property is not subject to any financial charges and that no others have any rights over the property"

Does anyone know whether this "limited title" occurs because it is the executors selling the estate (and therefore not aware of any charges) or whether it is simply standard wording?

DVardysShadow

The deeds have been lost and the property has not been registered at the Land Registry. As simple as that.

If the deceased were alive and sold, they would presumably know where the deeds were stored, so the problem would not arise. It is abit late to be learning this at exchange - your solicitor should have explained to you quite early on IMO. You need indemnity insurance to cover this - at the seller's expense, because it would be reasonable for you to offer assuming no problems with the title.

Grimbal

thanks for that - am concerned now. The first contract (with Power of Attourneys signing whilst vendor living) stated "full title guarantee". The second contract, after the vendor's death now states "limited title".

Do you think that means that they couldn't find the title after the vendor dying? The PoAs have been wrapping up the estate in preparation for the vendor's death since October last year - they should have known this upon drawing up of the first contract surely?

ETA: for clarity of timescales:
October: vendor becomes ill, PoAs start to wrap up estate
March: offer accepted whilst vendor still living
May: 1st contract signed as "full title". vendor dies, probate granted. 2nd contract delivered stating "limited title"

I'll obviously be calling my solicitors as soon as they open, but I'd just like to get an idea about the problems/issues involved before speaking to them after the bank holiday weekend

anselld

I think it is fairly normal for executors only to offer limited title guarantee on the grounds that they cannot possibly know or be held liable for everything the original vendor would have known. I don't think it necessarily implies that deeds are lost, but it does mean you have less options to sue for any misrepresentations which may crop up after sale.

Grimbal

yup, that's what I'm worried about. Do you think that it would be reasonable to request the following:

1. to confirm that the property is registered at HMLR with absolute title
2. that the vendors purchase indemnity insurance in case of broken covenants/unknown charges on the property

DVardysShadow

I would say they are reasonable. I would suggest insisting that the executors get it registered first - but take advice from your solicitor first.

anselld

Your solicitor will advise, but IMHO limited title guarantee does not necessarily mean the property is not registered. You can have title absolute registered yet still have the vendors offering limited title guarantee.
I would expect your solicitor to confirm (1) anyway as a matter of course. I don't know if (2) is feasible or not.

It should also be somewhat reassuring (though not in the legal sense) that the vendor was originally prepared to offer full title guarantee whilst still alive. I think this is just a case of executors not wishing to take on personal legal liability for the sale, probably as advised by their own solicitors.

SmlSave

The deeds have been lost and the property has not been registered at the Land Registry. As simple as that.

While this is true in some cases I'm not sure it applies in this case.

As a legal secretary I have to say that when Executors sell a house the Title Guarantee has to be limited as they have not lived at the property. It has nothing to do with the Title Deeds being lost.

Does the Contract say Registered Title with a Title number or Unregistered with a Route of Title?

DVardysShadow

SmlSave wrote: »

... As a legal secretary I have to say that when Executors sell a house the Title Guarantee has to be limited as they have not lived at the property. It has nothing to do with the Title Deeds being lost.

Does the Contract say Registered Title with a Title number or Unregistered with a Route of Title?

Well, I think you need to explain what a Title Guarantee is, then. I can't see that is has 'nothing' to do with Deeds being lost, we do get cases here where it does appear to be the case, although I would accept that it is not necessarily to do with lost deeds.

But I would echo your question concerning the Contract description of the Title.

Grimbal

SmlSave wrote: »

Does the Contract say Registered Title with a Title number or Unregistered with a Route of Title?

The report on title that my solicitor prepared shows the Land Registry copy of register of title with a title number (dated 1996). I think (and I may not be correct in doing so) that at the moment I'm more concerned with charges/broken covenants on the property which is why I would be reassured by an indemnity policy paid for by the vendors

Richard_Webster

Quote:
The deeds have been lost and the property has not been registered at the Land Registry. As simple as that.
While this is true in some cases I'm not sure it applies in this case.

As a legal secretary I have to say that when Executors sell a house the Title Guarantee has to be limited as they have not lived at the property. It has nothing to do with the Title Deeds being lost.

I agree. Prior to a change in the law in I think 1994 most conveyances/transfers would contain a phrase like this: "The Vendor as beneficial owner Hereby Transfers the land known as ..... to the Purchaser."

If it was an executor selling it would be "The Vendor as personal representative Hereby Transfers...."

Nobody raised any issues about that wording yet in both cases they implied different levels of title guarantee. Since the law changed you have been able to pick what level of title guarantee you give - most people give full title guarantee but executors etc only give limited title guarantee. This was the Law Commission's idea to simplify some obscure old rules so they thought using modern language was better and easier to understand. In fact the main result of the change of the law is one I will explain below.

But here's the main point. These title guarantees guarantee hardly anything in the real world in most cases for most people - the maxim "Caveat emptor" - "Let the Buyer beware" still applies in 99% of the cases and situations so there is really no point at all in getting excited about the difference between "full" and "limited" guarantees.

So the main result of the change in the law as far as I can see is that people ask this question from time to time on property forums. It has very little to do with very much in real life.