Adverse possession to possessory title.. might it affect a future borrower?

desthemoaner

Evening all

This might be a question for our Land Registry expert, but I'll try it here first. 

We’re buying a property. The seller’s solicitors didn’t send draft contracts to our conveyancer until  8 weeks after our offer was accepted, and accompanied the issuing of contracts with the information that the property was not registered during its 40 year owner occupation by the now deceased owner ( we're told that its not a probate sale)  Registration is now being addressed by the seller’s solicitor, and it appears that no more progress can be made until the matter is settled.

My solicitor tells me that in order to resolve the situation, the sellers’ solicitors make an application to LR for adverse possession,  and if the application is granted they will provide our solicitors with the title.  Our solicitors will then need to refer the possessory title to the lender (in our case there will be no lender because we’re buying outright), and they may not lend on the property as a result.  If they do, they will require a possessory title indemnity policy. AFAIK there are no title deeds, either hard copy or electronic.

 Providing this process is followed through and the title is eventually registered in our names, could any of the above mean that if we come to sell the property, a buyer might find it difficult to obtain a mortgage?

GoogleMeNow

desthemoaner said:

Evening all

This might be a question for our Land Registry expert, but I'll try it here first. 

We’re buying a property. The seller’s solicitors didn’t send draft contracts to our conveyancer until  8 weeks after our offer was accepted, and accompanied the issuing of contracts with the information that the property was not registered during its 40 year owner occupation by the now deceased owner ( we're told that its not a probate sale)  Registration is now being addressed by the seller’s solicitor, and it appears that no more progress can be made until the matter is settled.

My solicitor tells me that in order to resolve the situation, the sellers’ solicitors make an application to LR for adverse possession,  and if the application is granted they will provide our solicitors with the title.  Our solicitors will then need to refer the possessory title to the lender (in our case there will be no lender because we’re buying outright), and they may not lend on the property as a result.  If they do, they will require a possessory title indemnity policy. AFAIK there are no title deeds, either hard copy or electronic.

 Providing this process is followed through and the title is eventually registered in our names, could any of the above mean that if we come to sell the property, a buyer might find it difficult to obtain a mortgage?

How did the vendor's solicitor send draft contracts if there are no deeds? 

There will be no deeds at Land Registry if the property is unregistered.  However, are there paper deeds held by the vendor? 

If the vendor does have the paper deeds, your solicitor could apply for first registration after completion.

canaldumidi

desthemoaner said:

We’re buying a property. The seller’s solicitors didn’t send draft contracts to our conveyancer until  8 weeks after our offer was accepted, and accompanied the issuing of contracts with the information that the property was not registered during its 40 year owner occupation by the now deceased owner ( we're told that its not a probate sale) 

Either it is being sold by the Executors, passing ownership from the deceased to you (probate sale), or ownership has, or will, passed from the deceased to the Beneficiaries who will transfer to you in which case it is or will be registered in the Beneficiaries' name(s) (1st registration).

Registration is now being addressed by the seller’s solicitor, and it appears that no more progress can be made until the matter is settled.

Unlikely to the Beneficiaries who are selling.

My solicitor tells me that in order to resolve the situation, the sellers’ solicitors make an application to LR for adverse possession, and if the application is granted they will provide our solicitors with the title. 

For Adverse Possession, the applicant must have been and remains in occupation of the property (the executor of the deceased has effective 'occupation'). The Beneficiaries don't, so It's a probate sale.

Our solicitors will then need to refer the possessory title to the lender (in our case there will be no lender because we’re buying outright), and they may not lend on the property as a result.  If they do, they will require a possessory title indemnity policy.

This is gobbledegook! If there is no lender, your solicitor will not need to refer the title to a lender! Just to you. The question then is whether you will require indemnity insurance.

AFAIK there are no title deeds, either hard copy or electronic.

 Providing this process is followed through and the title is eventually registered in our names, could any of the above mean that if we come to sell the property, a buyer might find it difficult to obtain a mortgage?

Yes.

This may provide some background:

https://www.gov.uk/government/publications/first-registration-of-title-where-deeds-have-been-lost-or-destroyed/practice-guide-2-first-registration-of-title-if-deeds-are-lost-or-destroyed

desthemoaner

Many thanks for the replies. The deeds have indeed been lost, and I've been told that efforts are being made to contact the solicitors who handled the original sale, which would have been almost 50 years ago, to find out whether they have any documentation relating to the title.

I was also surprised that draft contracts have been issued in the absence of any title deeds. But I'm a layperson, so to some extent I tend to believe what solicitors tell me. 

I don't know why the case manager at our solicitors told me that the possessory title would be referred to the lender. Presumably she was relating the advice she'd been given by her line manager verbatim, so it wasn't tailored to our particular case.

Thanks for confirming that the above may effect a future sale where a mortgage is required, and for the link. Food for thought indeed.