Possessary Titles

hudo

If you wanted to buy a property where the deeds could not be found (as the parents had died) would you buy this property? Also how easy would it be to sell on (if before 12 years). Would really appreciate any advice, as I am completely numb - after all we had to get this place - now don't know what to do. it is still in the hands of the mortgage company legal advisers (as they had agreed to lend us the money before we found this out.)

Thanks

Hudo

cattie

Really your solicitors should be advising you on the prudence of continuing with this purchase, this is the kind of thing you pay them for & you need to ensure you have professional advice rather than relying on opinions from open forums.

The_Eye_Of_Sauron

This is a simplified explanation, but here goes. There is usually nothing wrong with a possessory title for mortgage purposes so long as it is backed by a title insurance policy.

Old unregistered deeds can and do get lost frequently. As a rule, if the deeds are lost whilst in the possession of a Bank or Building Society, or a solicitor, subject to the Bank/ Solicitor etc making a statutory declaration that a thorough search has failed to reveal them, the Land Registry will normally grant an ABSOLUTE title, and problem solved. It is usual for the bank/ Solicitor to pay the fees if they have lost the deeds.

Where deeds have been lost or destroyed, say by the current owner, and the land is not yet registered, again the Land Registry will grant POSSESSORY title upon the making of a statutory declaration by the appropriate person (usually the house owner).

Possessory title remains possessory for 12 years, following which you upgrade it to absolute title, unless someone else comes along with a better paper title (extremely rare occurrence indeed).

To cover you for that 12 year period, you ask the sellers (at their expense, usually by knocking the premium, which is usually a one-off few hundred pounds) off the purchase price.

For those 12 years, you and anyone you sell the property on to, and your and any subsequent mortgagees, are covered to the full value of the property if the worst happens. I mentioned the premium being a one-off above. I should qualify this by saying that if you sell in say 10 years time, and the value of your house has shot up, you may need to 'top up' the level of cover for the remaining 2 years, but again, its peanuts really, though you as the then seller would have to pay it.

Most mainstream lenders are quite happy to lend on a possessory title and an insurance policy.

HTH