Buying a freehold house that is in the process of being registered

littlemiss19

Hi everyone,

We've just found out the house we are planning to put an offer on has yet to be registered as the family have lived in it for more than 60 years and did not need to register it.
The estate agents selling the property seem to think that we can commence conveyancing while the family apply for the title but I am concerned that their application could take a really long time and I am not sure if they will get absolute title.

So, does anyone have any experience with the process of applying for absolute title? What evidence is required? If the sellers end up with possessory title is it still worth buying?

davidmcn

Why do you think they'd only get possessory title? 

Tiglet2

Applying for first registration can be done by sellers prior to the sale to you, or your solicitor can do it as part of the conveyancing work, though this will cost you more in fees but will be quicker than waiting for the sellers to make the application and wait for the Land Registry to send the updated title.  The fee at Land Registry will be double the 'online' fee because it will be a postal application.  The sellers should have kept all the paper documents and certificates which prove they are the owners of the property and they will need to send these to their solicitor, who will copy them and send to your solicitor as part of the draft contract pack.  If the paperwork proves ownership, then the title will be updated to absolute when you apply to the Land Registry for registration following completion.  

littlemiss19

davidmcn said:

Why do you think they'd only get possessory title? 

I am looking at worst case scenario. The house has been in the family for more than 60 years bought by the mother of the current owners. The current owners are in their 90s and our understanding is they are unable to locate the title deeds.  

Mickey666

As I understand things, a possessory title is open to being contested by anyone with a better documentary claim than the title holder, whereas a ‘title absolute’ is not.  So there is some risk in buying a property with possessory title, though if it is not contested within 10-12 years (can’t remember the exact time) then you can convert to title absolute.
I’ve heard about indemnity insurance for possessory titled properties but don’t know the details - you solicitor should be able to advise on this.  On the face of it, the chances of anyone contesting this particular property ownership seems very unlikely so perhaps an indemnity insurance would be adequate financial protection, although my understanding is that if the ‘real’ owner DID turn up with unrefutable evidence of ownership, then LR would give them title, in which case you’d lose the property (or negotiate with the owner) - which, presumably, is where the indemnity insurance would come in, ie you’d risk losing the property but would be financially compensated.  Ask your solicitor to advise but read the T&Cs of any indemnity policy VERY carefully.
It’s a tough choice though - tiny risk of any problems arising but huge consequences if it happens.

littlemiss19

Thanks everyone. 

I found a previous post from 2011 that also mentions the indemnity insurance. https://forums.moneysavingexpert.com/discussion/381995/should-i-buy-house-with-possessory-title


So, now I am wondering if the value will change especially as it may be tricky to sell on before getting the title is converted to absolute title which my research is showing will take 12 years. It's difficult to find any information online that indicates if there is a 'rule of thumb' for discounts for buying a freehold property with possessory title. Does anyone know anything about this? 

Mickey666

If you're prepared to buy it with an indemnity policy in place then presumably other people would as well if you decided to sell before 12 years and conversion to title absolute.  I doubt there's any 'rule of thumb' in such circumstances regarding discounts - that would just be down to the usual price negotiations between buyer and seller.

WIll you be needing a mortgage?  Have you had an offer as yet?  I wonder what their view of a possessory title might be?

greatcrested

Why not get your solicitor to review the vendor's title documentation? That's wat used to happen before electronic LR registration.

If he is satisfied that the vendors have 'good title' then

* no need to wait for the vendors to register

* no likelihood of possesory title

If your solicitor has concerns about the title, then wait for the vendor to register the title.