Title deeds missing.

dremario

I’m in the process of buying an ex-local authority property in London, but, things have turned out to be more complicated than they originally appeared.

It seems the property has never been bought or sold and for this reason it’s not registered in the Land Registry. Apparently it was owned by the same lady since it was built, and now that she’s passed away her daughter is selling it (probate has been granted). The title deeds of the property, however, have been lost and this complicates matters a lot.

My solicitor advised me to wait for the vendor’s solicitors to find a way of registering the property with the Land Registry and only after that I should proceed with the purchase.

The latest information I received today from the estate agent is that the process of registering the property will be completed in two weeks time. I do not know how they are managing to do this with
the title deeds missing.

I am very apprehensive, as I have no experience buying properties and would like to avoid everything that is dodgy.

Has anyone been in a similar situation?

Do you see any potential complications with this purchase?

Any advice would be much appreciated.

G_M

Makes no sense:

buying an ex-local authority property ....

It seems the property has never been bought or sold and for this reason it’s not registered in the Land Registry. Apparently it was owned by the same lady since it was built, and now that she’s passed away her daughter is selling it (probate has been granted). The title deeds of the property, however, have been lost and this complicates matters a lot.

Either the LA originally owned it, and sold it at some point to the lady

or the lady owned it since it was built

but not both!

Be that as it may, it is for the seller to prove ownership, either via Land registration or via Deeds.

Relax and let your solicitor do his job - he will ensure that the seller does one of the above. It may take time. If you are in a hurry and cannot wait, find another property.

TBagpuss

It surely can't have been owned by the same person since it was built if it is an ex-council property, although it may have been *occupied* by the same person.

This http://www.landregistry.gov.uk/professional/guides/practice-guide-2 gives some information about the type of steps which the sellers will need to take in order to register the property.

It's likely to delay things, especially as locating who the original owner had a mortgage with, and which firm dealt with the purchase,and whether they are still around may take time.

Your solicitor should be able to tell you whether there are likely to be any problems. If the sellers can only register possessory title this could effect your mortgage

dremario

My understanding is that the property was originally owned by the Local Authority. I was hoping that the vendor’s solicitors would be able to register it with an absolute title.
I was led to believe that possessory titles should be avoided at any cost, is that the case and why?

Land_Registry

TBagpuss has already linked to our online guidance about first registration when the deeds have been lost or destroyed.
The owner is effectively claiming that they own the property through demonstrating who held the deeds and why as well as what efforts have been made to locate them.
Clearly as the claimed owner has now dies this can make it trickier as the Executor may have little knowledge of the property and how the lady dealt with her affairs.
Whilst every application is treated on merit the certainty of the facts are crucial in obtaining Absolute title. If there is any doubt we will probably grant only a possessory title.

The vast majority of titles are Absolute and therefore the subject of a title guarantee. Under this guarantee, we may pay indemnity where there is an error or omission found on a title, thus compensating an injured party.

Where the deeds have been lost there may be undisclosed adverse interests affecting the title. By registering with a possessory class of title, we are not liable to pay indemnity in respect of any such adverse interest coming to light after registration. The guarantee on a possessory title covers only errors or omissions on the title occurring since the date of registration.

A possessory title therefore includes additional risks but your solicitor will be able to advise on these. Your mortgage lender (if any) may also have a view of course. But until the title is registered we cannot be certain what those issues may be.

As far as 'avoiding at any cost' is concerned it is probably for others to post but Possessory titles are not uncommon and can be sold and mortgaged just like any other title. However in my experience over the years attitudes towards them can change depending on how risk averse individuals, solicitors and/or mortgage lenders are at any one time.

Note - a possessory title can be upgraded to absolute after 12 years since the date it is first registered. It can also be upgraded if the title defect is remedied for example in this case perhaps as and when the deeds are found.

dremario

Land Registry Representative,
thank you for the explanation, it made matters much clearer.

If the property was registered with a possessory title and I went ahead and bought it, my understanding is that I will need an indemnity insurance to safeguard my interest if a third party challenge my ownership.
How does an indemnity insurance work? How would I be compensated?

G_M

dremario wrote: »

Land Registry Representative,
thank you for the explanation, it made matters much clearer.

If the property was registered with a possessory title and I went ahead and bought it, my understanding is that I will need an indemnity insurance to safeguard my interest if a third party challenge my ownership.
How does an indemnity insurance work? How would I be compensated?

The insurance company would pay out for any financial loss you incurred as a result of a succssful challange. They might also pay the legal fees incurred in defending such a challange, but check the small print!

It would NOT protect you from losing the property though. If a genuine owner came forward and successfully claimed ownership, he would get ownership. You would then claim cash for your loss..... but would have to move out.

dremario

G_M wrote: »

The insurance company would pay out for any financial loss you incurred as a result of a succssful challange. They might also pay the legal fees incurred in defending such a challange, but check the small print!

It would NOT protect you from losing the property though. If a genuine owner came forward and successfully claimed ownership, he would get ownership. You would then claim cash for your loss..... but would have to move out.

If I lost the property, what would be the amount that I can claim:
the amount I paid for the property,
or
the market rate at the time when I have to move out?

Land_Registry

dremario - issues around indemnity insurance and what they can or cannot cover is not something we are involved in I'm afraid. So G_M and others are much better placed to advise on such matters.

Sorry I can't help but will watch the thread with interest to see what advice is posted

dremario

Land_Registry_representative wrote: »

dremario - issues around indemnity insurance and what they can or cannot cover is not something we are involved in I'm afraid. So G_M and others are much better placed to advise on such matters.

Sorry I can't help but will watch the thread with interest to see what advice is posted

Is there a number for the Land Registry which I can call in order to get more information on the registration of the property in question?

Jeffrey_Shaw

dremario wrote: »

Is there a number for the Land Registry which I can call in order to get more information on the registration of the property in question?

Yes- but there are different numbers for different parts of E&W and even for different parts of London!
See http://www.landregistry.gov.uk/professional/guides/practice-guide-51 (parts 2.3 and 3).