Buying a house with a Possessory title not Absolute.

zcrat41

Hi, I'm after people's thoughts.


We're in the process of buying a house built about 5 years ago. It's emerged that the title deeds are Possessory not Absolute. The solicitor is enquiring more into why this has occurred. The next door neighbour sold the land for the house to be built on so I'm presuming that they had lost the original title deeds but I guess another reason may come to light which we'll have to deal with as and when.


It doesn't worry us too much as we are cash buyers and we'll only go ahead if the vendor will pay for indemnity insurance against the risk of someone else turning up with the original deeds.


However, we will only be in the house 3 - 4 years and then wish to sell on. How much will people who need a mortgage be put off. By then there will only be between 4-5 years left before it can become absolute.


Any other experiences/thoughts/words or wisdom or warning for me?


Thanks


ZC

da_rule

If the possessory title is based on lost deeds then there should be a statutory declaration made explaining the loss. As long as this is in place, and providing that the title is registered then most mortgage lenders appear to be accepting of this (according the Council of Mortgage Lenders Handbook).

The other option is that the either this property, or the one from which this property was sold, was acquired through adverse possession ('squatters rights').

zcrat41

Thanks darue. I'd be surprised if it's the latter as the neighbours are still there and have been quite helpful already. They seem to want to help their current neighbours. Hopefully the solicitor will come back saying it's just lost deeds.

da_rule

Yeah, if it's just lost deeds then a statutory declaration coupled with indemnity insurance should be sufficient. Obviously when you come to sell the property you may find yourself having to pay for an indemnity policy for your buyer.