Should I buy house with possessory title?

woowoo_3

I would like to ask for some advice. My partner and I have been going through the process of buying a house and are now ready to sign. However it has now been discovered that the title deeds have been lost and the property having been lived in by the vendor for so long has never been registered. This means the land registry will only grant possessory title which lasts for 12 years before you can upgrade to full title. The vendors have taken out an indemnity policy to cover this defect.
Our solicitor seems to think this is perfectly acceptable and that we should go ahead. However our solicitor is working for the same company as the vendors solicitor and while this has meant there have been no delays in the proceedings it does raise my suspicion as to whether there may be a conflict in interests. I also spoke to the land registry who told me it was an acceptable title providing insurance is in place. So I went to get some free advice from another solicitor just for some peace of mind and they told me NOT to go ahead with the purchase. So now I'm really confused.
My main concern is if we try to resell would potential buyers be put off by this.
Has anybody else experienced this before?
I would be very grateful for any advice.

TJ27

I had almost exactly the same situation when I bought.

It wasn't a problem, as long as the insurance was in place.

The deeds had been lost but the house was registered five years prior to me buying it. Seven years later I converted to absolute title very easily. So you'll need to register it asap I guess.

RufusFrog_2

I think you should consider (and take advice on) how the VALUE of the property is affected by the defect in title given that you weren't informed of it when you made the offer.

We pulled out of a purchase because there was no legal right of access to it from the road and the sellers had lied about it on the Property Information Form. There was an indemnity policy in place but our view was that it only insures against the financial loss, not the tremendous hassle involved if someone suddenly blocks the driveway or starts demanding ground rent. And partly because we thought: if we are having second thoughts, will it be more difficult to sell?

I don't think there's a simple black/white answer here. You need to go with your gut. In practice the chances of someone suddenly turning up and saying 'I own this piece of land and can prove it!' are miniscule, but how would you cope if it happened? (And we knew someone who'd had their drive blockaded.)

Richard_Webster

Depends a bit on the strength of the evidence that the seller has provided but usually it is OK if protected by insurance. So in general terms I would tend to agree with your first solicitor's advice.

There is the slight point that when you come to sell, it might be more difficult simply because whether or not there actually is a problem, some people may think there is! Unfortunately as a conveyancing solicitor I find some of my job is advising people not only about the law but about what others may think the law is, because this could still affect them, whether the others are right or wrong!

As a conveyancing solicitor I believe the information given in the post to be useful but I accept no liability except to fee-paying clients.

woowoo_3

Thank you to all who responded I have found this very helpful, I guess we should re-negotiate price to make it less of a one sided compromise.