Unregistered Land on New Build Property

Hartley10

Hi


We have been looking to purchase a New Build property from a developer. The properties are 4 x semi detached and at the rear of the houses are 2 x allocated parking spaces. Our solicitor has advised that there is a strip of land horizontally across all of 8 of the car parking spaces (circa half of the spaces). Our solicitor has referred this to our mortgage company and also to HCA (as part of our mortgage will come from Help to Buy). We are on tenderhooks as to whether either/both will withdraw their mortgage offering.


We understand that the developer will be providing an indemnity policy for the access over this unregistered land.


Any thoughts/advice/ideas - we are really worried that we will lose the house if the lenders withdraw.
thanks

dc197

Surely if the land on which you will be parking will not be part of your title, the lender won't mind? The lender will be concerned about the property itself and not so much about unrelated unattached land.

I park on land not registered to me and my lender doesn't even know.

Will the parking space form part of the title? Will the currently-unregistered land become registered to you (well, a quarter of it) upon purchase?

davidmcn

dc197 wrote: »

Surely if the land on which you will be parking will not be part of your title, the lender won't mind? The lender will be concerned about the property itself and not so much about unrelated unattached land.

The parking spaces being allocated means that the OP will be getting some form of rights to them (otherwise in what sense are they "allocated"?) - so that will be part of the title, and the lender will be interested. But any (normal) lender won't care, or even need to be told, as long as there is suitable indemnity insurance. Don't know about HCA but I doubt they'd be any fussier.

Hartley10

Thanks for the responses. The 2 parking spaces for each house will as I understand it will form part of the Title Deeds. The indemnity policy I understand will provide cover for disputes over access to the spaces. The land will remain unregistered until such time we can apply for it (12 years I've read). Whether this unregistered land devalues the property I doubt and with an indemnity policy in force surely the lenders interest is protected and shouldn't affect their lending decision (they have both provided mortgage offers)

davidmcn

Hartley10 wrote: »

with an indemnity policy in force surely the lenders interest is protected and shouldn't affect their lending decision (they have both provided mortgage offers)

If the lender subscribes to the Council of Mortgage Lenders Handbook (and all the mainstream lenders do) then the standard instructions to solicitors are that the lender doesn't need to be told about such things, as long as the solicitor is satisfied that the indemnity cover is satisfactory.

From your point of view it might be a minor complication when you come to sell, as the purchasers will need to get their head around what the problem is and whether the indemnity cover is sufficient. But I wouldn't worry about it.

Hartley10

Update on this - our lender Halifax have agreed all ok but HCA on behalf of Help to Buy have said no. Our solicitor is going to go back to HCA on the basis that the main lender is ok with it. Developers not overly happy either as this affects all 4 properties - as all are using HTB.

TBeckett100

I suspect H2B will try and wangle out of new build loans where the rule book allows. With the threat of falling prices and new builds tend to be hit hardest, their 20% may not look as good in a few years

dc197

I must be missing something. How can the land be both unregistered and part of a title at the same time?
Could someone tell me what I've misunderstood please?

davidmcn

dc197 wrote: »

I must be missing something. How can the land be both unregistered and part of a title at the same time?
Could someone tell me what I've misunderstood please?

Taking an educated guess: the developers don't have any title to part of the access, because they haven't been able to trace the owner. Nobody can claim adverse possession until the relevant number of years has passed, so for so long as there's a risk of the real owner crawling out of the woodwork, you need indemnity insurance.

(possibly confusion between "unregistered" meaning "having a title which isn't registered", and meaning "not having a registered title, because you don't have any title")

Hartley10

dc197 wrote: »

I must be missing something. How can the land be both unregistered and part of a title at the same time?
Could someone tell me what I've misunderstood please?

Apologies maybe wrong terminology from me. Essentially the houses have two car parking spaces at the rear of which circa 1m x width of two spaces each is unregistered land.


Therefore assume our title deeds will stop at the unregistered land.


Will be interesting to see if HCA change their mind - there is indemnity insurance in place and the size is minimal.!!!