Land not registered but part of the property purchase

davidmcn

LLizz said:

davidmcn said:

LLizz said:

SDLT_Geek said:

Two different situations:
(a)  A property has perfectly good documentary title, but it comes in two parts, one a registered title, the other an unregistered title (made up of conveyances etc).  The buyer's solicitor can give a clean certificate of title.  Both parts will be registered at the Land Registry after completion, one part involving a change of name on the title, the other a first registration.  All normal, routine stuff.
(b)  The seller does not have documentary title to part of the property they have been occupying and so relies on adverse possession to make title.  This is where there will be doubts as to the quality of the title and buyers might want the seller to voluntarily register their title first.  Title insurance might help.  Lenders might be concerned.

But what I think I am being told is (is this right?) --this can happen via his or MY solicitors. And we should query both avenues and go with the quickest?
I've since read these things can be expedited if it is the only thing holding up the sale?

Yes. But no need to expedite registration if it's being done after completion anyway.

And are there any risks to this? Is there any merit in having it all in place BEFORE completion?

Only the rather small risk of the Land Registry asking for something surprising which you (or the vendor) are unable to provide. As I said, your solicitor should be able to work out what (if any) risks there actually are once she's seen the titles.

tigerlily74

LLizz said:

tigerlily74 said:

We have a similar situation. The unregistered land with our property was not conveyed properly when our seller bought it over twenty years ago. After discussion with our solicitor and in light of the fact we can’t wait for our seller to apply for adverse possession (similar reasons to yours) our plan a is to apply for adverse possession after completion, with evidence supplied by the seller, and an indemnity policy. My solicitor will have to report this ‘defect’ to the lender, who may not agree. But our ltv is 18% and it is our dream home so I am hopeful. Our seller and his solicitors don’t seem to want to do anything or evens hair basic information so my solicitor is having to do all the thinking for them which she is not happy  about.

Sorry to hear you're struggling with the same. I hadn't even thought about our mortgage. Our ltv is 21% so we are well in. I'm just praying this can all be pulled off much the same as yourself.
I can't see our vendor wanting to do much either -- it took him/his solicitor 4weeks to send over the contract pack - the most BASIC piece of documentation.

Yes it’s a nightmare isn’t it. Our seller is the same, he has cheap solicitors who took six weeks to send anything and still haven’t sent the second title, and very minimal info on the unregistered piece. My solicitor is very cross with them. I think in January I am going to ask her if we can handle it as a separate sale and do all the hard work ourselves! I hope yours proves to be in the simple category!

greatcrested

To explain further:

If a property is not registered, the seller is relying on paper deeds to prove ownership. This is how it always used to be done pre-electronic records, and still is for proprties that have not changed hands in the last 30 odd years. This seems to be the case with the additional plot in your case.

So the seller must prove to the buyer that they own the land, and can therefore sell it.

Typically the seller shows the paper Deeds from when he bought the house. And to prove that that purchase was valid from the previous owner, he'll also produce the deeds from the previous owner, and so on. Sometimes multiple deeds covering tens of sales over decades, each strenghtening the seller's claim to own the house which you wish to buy.

If some of these paper deeds are missing or don't go back very far, there is an element of doubt about his ownership and hence his right to sell to you.

So in your case, much depends on the paper deeds the seller holds.

Assuming they exist, there is no reason your solicior cannot review them in advance to ensure your seller really owns the land (just as would have happened in every sale up to the 1980s). If satisfactory, you can safely buy both plots immediately.

* The registered Title for the house will be transferred into your name.

* The unregistered Title for the land will be registered (1st Registration process) in your name.

The issue arises if the seller is unable to produce paper deeds, or your solicitor deems them to be in some way incomplete.

There are then several options:

* the seller applies for 1st Registration at the LR before you buy - that way, he takes the risk of the registration being declined

* the seller applies for Adverse Possession, based on having used the land for 12 years, the land is then registered, and you buy after this has happened

* the seller gives you a 'Statement of Truth' that they've used the land for 12 years. You buy, and then you apply for Adverse Possesion, but there is some risk of your claim failing.

LLizz

greatcrested said:

To explain further:

If a property is not registered, the seller is relying on paper deeds to prove ownership. This is how it always used to be done pre-electronic records, and still is for proprties that have not changed hands in the last 30 odd years. This seems to be the case with the additional plot in your case.

So the seller must prove to the buyer that they own the land, and can therefore sell it.

Typically the seller shows the paper Deeds from when he bought the house. And to prove that that purchase was valid from the previous owner, he'll also produce the deeds from the previous owner, and so on. Sometimes multiple deeds covering tens of sales over decades, each strenghtening the seller's claim to own the house which you wish to buy.

If some of these paper deeds are missing or don't go back very far, there is an element of doubt about his ownership and hence his right to sell to you.

So in your case, much depends on the paper deeds the seller holds.

Assuming they exist, there is no reason your solicior cannot review them in advance to ensure your seller really owns the land (just as would have happened in every sale up to the 1980s). If satisfactory, you can safely buy both plots immediately.

* The registered Title for the house will be transferred into your name.

* The unregistered Title for the land will be registered (1st Registration process) in your name.

The issue arises if the seller is unable to produce paper deeds, or your solicitor deems them to be in some way incomplete.

There are then several options:

* the seller applies for 1st Registration at the LR before you buy - that way, he takes the risk of the registration being declined

* the seller applies for Adverse Possession, based on having used the land for 12 years, the land is then registered, and you buy after this has happened

* the seller gives you a 'Statement of Truth' that they've used the land for 12 years. You buy, and then you apply for Adverse Possesion, but there is some risk of your claim failing.

Thanks so much for such an in depth reply. I really appreciate you taking the time...
This pretty much sums up all of the worry for us...

I think my fiance is a little irritated as he wants everything to be 'as one' as that's what we were led to believe we were buying.
However, although I'm risk-adverse I see the bigger picture -- seems to me so long as the deeds are all accurate and there are no gaps we would be fine... And things can all be registered as we complete and eventually be amalgamated - is there a cost to this I don't suppose you would know? Should we have to pay this?

greatcrested

LLizz said:

greatcrested said:

To explain further:

If a property is not registered, the seller is relying on paper deeds to prove ownership. This is how it always used to be done pre-electronic records, and still is for proprties that have not changed hands in the last 30 odd years. This seems to be the case with the additional plot in your case.

So the seller must prove to the buyer that they own the land, and can therefore sell it.

Typically the seller shows the paper Deeds from when he bought the house. And to prove that that purchase was valid from the previous owner, he'll also produce the deeds from the previous owner, and so on. Sometimes multiple deeds covering tens of sales over decades, each strenghtening the seller's claim to own the house which you wish to buy.

If some of these paper deeds are missing or don't go back very far, there is an element of doubt about his ownership and hence his right to sell to you.

So in your case, much depends on the paper deeds the seller holds.

Assuming they exist, there is no reason your solicior cannot review them in advance to ensure your seller really owns the land (just as would have happened in every sale up to the 1980s). If satisfactory, you can safely buy both plots immediately.

* The registered Title for the house will be transferred into your name.

* The unregistered Title for the land will be registered (1st Registration process) in your name.

The issue arises if the seller is unable to produce paper deeds, or your solicitor deems them to be in some way incomplete.

There are then several options:

* the seller applies for 1st Registration at the LR before you buy - that way, he takes the risk of the registration being declined

* the seller applies for Adverse Possession, based on having used the land for 12 years, the land is then registered, and you buy after this has happened

* the seller gives you a 'Statement of Truth' that they've used the land for 12 years. You buy, and then you apply for Adverse Possesion, but there is some risk of your claim failing.

I think my fiance is a little irritated as he wants everything to be 'as one' as that's what we were led to believe we were buying.
However, although I'm risk-adverse I see the bigger picture -- seems to me so long as the deeds are all accurate and there are no gaps we would be fine... And things can all be registered as we complete and eventually be amalgamated - is there a cost to this I don't suppose you would know? Should we have to pay this?

If you end up buying 2 titles and then choose to amalgamate them, there will be a modest Land Registry fee. I believe with a little research you could DIY.

However if you have a mortgage on etiher Title, you'd need the lender's permission, and the lender would probably require a solicitor to do it which would add a cost.

But owning the titles separately is really not an issue. Either way, they belong to you.

LLizz

greatcrested said:

If you end up buying 2 titles and then choose to amalgamate them, there will be a modest Land Registry fee. I believe with a little research you could DIY.

However if you have a mortgage on etiher Title, you'd need the lender's permission, and the lender would probably require a solicitor to do it which would add a cost.

But owning the titles separately is really not an issue. Either way, they belong to you.

Thanks again. This is useful to know...
So, if the portion of land needs registering as a first-registration; is there a cost? Should the vendor be asked to foot this bill?

How does having two titles affect our mortgage/lender? I presume this could be a hurdle as the valuation takes the whole plot and house into consideration?
We will be using a mortgage to purchase the property - so that could present issue if we did decided to join them too. 
If I pacify the other-half and go with his worries... He's worried two titles will bring along more complexities. Esp' if we needed to sell/move. 

greatcrested

LLizz said:

greatcrested said:

If you end up buying 2 titles and then choose to amalgamate them, there will be a modest Land Registry fee. I believe with a little research you could DIY.

However if you have a mortgage on etiher Title, you'd need the lender's permission, and the lender would probably require a solicitor to do it which would add a cost.

But owning the titles separately is really not an issue. Either way, they belong to you.

Thanks again. This is useful to know...
So, if the portion of land needs registering as a first-registration; is there a cost? Should the vendor be asked to foot this bill?

Not much differet to registering your purchase  on a registered popety, so no.

Transactions under Scale 1

First registrations

If the application is made within one year of an open market sale, base the fee on the consideration (including the amount outstanding under any continuing charge).

https://www.gov.uk/guidance/hm-land-registry-registration-services-fees#first-registrations

greatcrested

LLizz said:

greatcrested said:

If you end up buying 2 titles and then choose to amalgamate them, there will be a modest Land Registry fee. I believe with a little research you could DIY.

However if you have a mortgage on etiher Title, you'd need the lender's permission, and the lender would probably require a solicitor to do it which would add a cost.

But owning the titles separately is really not an issue. Either way, they belong to you.

How does having two titles affect our mortgage/lender? I presume this could be a hurdle as the valuation takes the whole plot and house into consideration?
We will be using a mortgage to purchase the property - so that could present issue if we did decided to join them too. 
If I pacify the other-half and go with his worries... He's worried two titles will bring along more complexities. Esp' if we needed to sell/move.

You would probably get the mortgage against the registered property. This is likely to be constitute the bulk of the value - land on its own has little value. How much (%) are you borrowing?

If you were borowing 100% as in the good old days when this was possible, then having to discount the unregistered plot would be an issue, but I imagine you are borrowing 85% or less?

Once you own, I can't see the lender objecting to amalgamation - you would be adding value t the property they have a Charge over, not reducing it's value.

There's really no complexity in having two titles. You simply make clear to any buyer that you are offering both for a combined price of £X. It happens all the time.

I recently sold my deceased mother's house and found she had bought an additional bit of garden years ago from the neighbouring school, which was on a separate title. There were no issues.

I believe the buyer got a mortgage on the house/main garden, and the additional plot was not mortgaged. Whether they then amalgamated I have no idea.

LLizz

greatcrested said:

You would probably get the mortgage against the registered property. This is likely to be constitute the bulk of the value - land on its own has little value. How much (%) are you borrowing?

If you were borowing 100% as in the good old days when this was possible, then having to discount the unregistered plot would be an issue, but I imagine you are borrowing 85% or less?

Once you own, I can't see the lender objecting to amalgamation - you would be adding value t the property they have a Charge over, not reducing it's value.

There's really no complexity in having two titles. You simply make clear to any buyer that you are offering both for a combined price of £X. It happens all the time.

I recently sold my deceased mother's house and found she had bought an additional bit of garden years ago from the neighbouring school, which was on a separate title. There were no issues.

I believe the buyer got a mortgage on the house/main garden, and the additional plot was not mortgaged. Whether they then amalgamated I have no idea.

We have the mortgage agreed. They were v quick (esp in current climate) and visited to value the property ten days after the offer was accepted (some 4weeks ago now). How they value a property though I’m not clear. Presumably the land (as it was advertised as having ‘a considerable plot of land with scope for extending stpp’). Hmm... will the solicitor need to inform? Could this be why she’s trying to get the two amalgamated now?

We have a 21% deposit (and so a 79% mortgage). 

With what you’ve said (if ever we came to sell) about making it clear they were buying the two combined - I wonder if the vendor this time around ought to have been more transparent and done the same... 
Sorry to hear about your mother and Thankyou for sharing that with us - v similar to our situation. 

SDLT_Geek

LLizz said:

We have the mortgage agreed. They were v quick (esp in current climate) and visited to value the property ten days after the offer was accepted (some 3weeks ago now). How they value a property though I’m not clear. Presumably the land (as it was advertised as having ‘a considerable plot of land with scope for extending stpp’). Hmm... will the solicitor need to inform? Could this be why she’s trying to get the two amalgamated now.

Your seller seems to have documentary title to the whole property.  Part is registered title and part is unregistered title.  So long as it is all in order, then your solicitor should be able to give a clean certificate of title confirming that there is good title to the property as seen by the valuer.  
This should be much more straightforward than a case where the seller has no documentary title to part of the property and is relying on adverse possession.  You probably do not need to worry.