Buying a new build with possessory title?

osbora

Old property pulled down and two new houses built, I'm in process of buying one and have just found out the title is possessory only. Seems deeds were lost on the original old house, subsequently registered in 2009. Builder bought plot in 2011 with possessory title and built the new houses.

Is this unusual? I thought most property was registered even if the deeds had been lost? Builder has an indemnity but only for the original amount he bought the old bungalow for and obviously now the new house is worth much more on the plot and indeed the plot is now split across two houses.

Would getting a mortgage be a problem? Should I ask to discount the price and by how much if don't have full title? I understand full title can be passed after a period, is this from the original register or each subsequent owner? Got a solicitor on board and am waiting for answers but any light/experience people can shed on this would by much appreciated.

ValHaller

Take advice from your solicitor on the specifics.

Usual route is a new indemnity policy, which I suggest should be included in the price. Don't go making too many local enquiries about the title, because you risk invalidating a policy.

In your position I would want to know for how long the title was established prior to 2009 for the possessory title - if the property was held for say 40 years by the people who lost the deeds and there is a declaration on record at the Land Registry which covers their ownership, then it is probably not a big deal.

Land_Registry

A possessory title is not a rarity and often this is all that can be granted where an owner has lost the deeds - our Practice Guide 2 explains the procedures involved.

Such titles can often be upgraded 12 years after the date they were first registered and our Practice Guide 42 explains this in more detail.

A prospective lender would be able to advise you on whether getting a mortgage against the title would be an issue although such titles are often mortgaged and sold. I suspect lenders would look at each individual situation on merit in much the same way as an insurance company offering indemnity would as well.

As ValHaller rightly states your solicitor should be able to advise on the specifics.

The registered title does not provide any specific details with regards the evidence provided to secure the title. This would be contained within the papers lodged in support of the application, often in the form of a statutory declaration or statement of truth. An official copy of the document(s) lodged and retained by Land Registry may be available on application.

osbora

Many thanks for the responses above, still waiting for more details from solicitor. Statutory declaration given in 2009 and title registered at this point as the deeds were lost, builders bought in 2011 with the possessory title. Will ask how long first owners were there for. Still wondering if I should ask for a discount on selling price due to the lessor title and what percentage may be appropriate?

Fire_Fox

Again take advice from your solicitor, don't see why you would ask for a discount, there is no reduction in market value value is there? Could get an indemnity policy perhaps.

ValHaller

osbora wrote: »

Many thanks for the responses above, still waiting for more details from solicitor. Statutory declaration given in 2009 and title registered at this point as the deeds were lost, builders bought in 2011 with the possessory title. Will ask how long first owners were there for. Still wondering if I should ask for a discount on selling price due to the lessor title and what percentage may be appropriate?

How long the first owners were there for is not very useful information. In fact if you start investigating this without understanding what you are doing, you could mess up the possibility of indemnity insurance

What you need is in the last para of the Land Registry Rep's response above - sight of the evidence filed in support of the possessory title. This will indicate not only how long the 2009 occupiers were there but also the circumstances.

osbora

Thanks, there is some sort of insurance in place and solicitor had advised looks like an old property where deeds have been lost for some time it would appear (and she has seen the correspondence on this) and the declaration was made by the owner and then the plot subsequently sold on. Just speaking to mortgage people to see if they are happy to proceed or not which will be the killer decision.

Appreciate all the advice, was something I'd never heard of until now.