Dilemma due to possessory title

desthemoaner

 Morning all

Just following on from an earlier thread, I’d like to ask for more general advice on our house buying/ selling journey. Sorry about the length of the post.

We put our bungalow on the market at the end of July and by mid August we had a buyer. They are in rented accommodation so no chain, and very keen to move in here. There’s a lot of noise and anti social behaviour in the neighbourhood where they live, and they told me it’s “doing their heads in”. Where we live we have open land next door, our neighbours are quiet and it couldn’t be more different, but we're both in our 60s, and want to move to be nearer family. 

We made a successful offer on our purchase at the end of August. There are a number of significant improvements that need doing, including re-laying of drains, and total cost will be around 12k.  Our initial offer was several thousand above asking price, and through negotiation following the survey  that was eventually whittled down to just above asking.

As mentioned elsewhere we discovered about 2/3 weeks ago that the property we’re buying is unregistered. We’d never come across this before, so we were dealing with the situation from a standing start.  Long story short: the original occupier who lived there for over 40 years died about six months ago, the sale was taken on by his family following probate ( we’re told)  and the deeds have been lost.  Therefore the best we can hope for is "possessory title" on completion.

I’ve read quite a bit of stuff about PT, both from solicitors and from people on forums like this one. Some say they wouldn’t touch it with a bargepole, others that it’s not really much of a problem, especially if you plan to stay there for 12 years and convert to absolute title.  I’m really not sure we’ll be there that long, and I’m concerned about the effect on the marketability of the property if it’s sold with PT.

Meantime our buyers are starting to put pressure onto us to complete. The wife has recently been diagnosed with a serious illness, and it appears that their current living circumstances are making her health worse.  I therefore feel  under pressure to go ahead with the current purchase, despite being unhappy at the prospect of buying a property with possessory title.  If I go with what’s in our interests, my gut feeling is that we pull out of the purchase and tell our buyers they’ll have at least another few months to wait, providing we find something else soon. Having set their hearts on buying our house I think they'll wait, but I wouldn't want any decision we make to be the cause of a deterioration in the lady's health.

Clearly only we can decide the best course of action in the circumstances, but I’d welcome opinions on any or all of the above.

babyblade41

We bought our property with possessory title , very similar situation to yours as elderly owner was in a home rather than a probate property.

POA's were selling it and when they registered the property they missed a bit of the garden off as they weren't sure .

It was a lengthy process to go through as  a surveyor comes out to check and then any neighbouring properties are notified to put in an objection within a certain amount of time 

With ours it was quite clear as the boundary walls were in situ and had been there for many many years 

I suppose some will not want the hassle but if it's somewhere you really want to be then it wouldn't bother me at all 

ETA the separate title which was gained by adverse possession is only a small piece of garden , not the whole property

desthemoaner

babyblade41 said:

We bought our property with possessory title , very similar situation to yours as elderly owner was in a home rather than a probate property.

POA's were selling it and when they registered the property they missed a bit of the garden off as they weren't sure .

It was a lengthy process to go through as  a surveyor comes out to check and then any neighbouring properties are notified to put in an objection within a certain amount of time 

With ours it was quite clear as the boundary walls were in situ and had been there for many many years 

I suppose some will not want the hassle but if it's somewhere you really want to be then it wouldn't bother me at all 

ETA the separate title which was gained by adverse possession is only a small piece of garden , not the whole property

 Thanks for that. The boundaries of the bungalow we're trying to purchase are relatively clear, although not all are marked by fences or walls.  I'm not terribly worried about someone coming along,  claiming the property and forcing us to move out, and in any case we would be provided with indemnity insurance by the sellers. Its more the effect on the value and marketability that bothers me if, as I anticipate, we don't remain there for the full 12 years in order to claim title absolute.

GoogleMeNow

I bought a house that was already held by possessory title from sellers who had only lived there for six years.  The sellers bought the indemnity policy to protect us for the sale to proceed.  We actually did live there for more than 12 years, but no one ever claimed ownership during the time we lived there and the property was upgraded to absolute title before we sold.

I think if the late sellers had been in the property for 40 years, then it is extremely unlikely that anyone will challenge your ownership in the next few years, so it wouldn't worry me.

This was the reply you received from the Land Registry thread:

"It’s possible but rare to give Absolute title in such cases. You are right though re the quality of the evidence but if the deeds have been lost that quality is lost and it’s their statement of truth and other evidence they are relying on. That’s not the same as having the legal deeds"

Not really sure what else we can add.  It is your decision whether to accept the situation and proceed, or abort the purchase of this property. 

desthemoaner

GoogleMeNow said:

I bought a house that was already held by possessory title from sellers who had only lived there for six years.  The sellers bought the indemnity policy to protect us for the sale to proceed.  We actually did live there for more than 12 years, but no one ever claimed ownership during the time we lived there and the property was upgraded to absolute title before we sold.

I think if the late sellers had been in the property for 40 years, then it is extremely unlikely that anyone will challenge your ownership in the next few years, so it wouldn't worry me.

This was the reply you received from the Land Registry thread:

"It’s possible but rare to give Absolute title in such cases. You are right though re the quality of the evidence but if the deeds have been lost that quality is lost and it’s their statement of truth and other evidence they are relying on. That’s not the same as having the legal deeds"

Not really sure what else we can add.  It is your decision whether to accept the situation and proceed, or abort the purchase of this property. 

Thanks to you also and yes, that last point of yours is indeed the bottom line. We have to decide, but its still useful to hear from those with experience of possessory title before making that decision, hence my OP.

My enquiry to LR was intended to explore the possibility that title absolute could be granted in the absence of deeds, IF supporting evidence was good enough. That seems unlikely, but I still felt that I had to ask. 

GDB2222

If this property had a major defect in the roof, say, you'd ask for a big reduction in price to allow for it. This property has an invisible defect, that is in the title.  Surely, the price should be reduced to reflect that?

I suppose that one measure of this is whether the property is easily mortgageable? If it can't be mortgaged, then it's cash buyers only, and there's typically a 20-30% discount. 

The fact that other people have got away with it doesn't mean that there isn't a risk. And, if there's a risk, you need to be compensated for taking it on.

Given that the previous owner was resident for 40 years, the chances of someone else successfully claiming the house are minimal. Even so, if it's not easily mortgageable, and that's up to the lenders not you, the value is significantly diminished.

desthemoaner

GDB2222 said:

If this property had a major defect in the roof, say, you'd ask for a big reduction in price to allow for it. This property has an invisible defect, that is in the title.  Surely, the price should be reduced to reflect that?

I suppose that one measure of this is whether the property is easily mortgageable? If it can't be mortgaged, then it's cash buyers only, and there's typically a 20-30% discount. 

The fact that other people have got away with it doesn't mean that there isn't a risk. And, if there's a risk, you need to be compensated for taking it on.

Given that the previous owner was resident for 40 years, the chances of someone else successfully claiming the house are minimal. Even so, if it's not easily mortgageable, and that's up to the lenders not you, the value is significantly diminished.

Thanks once more. As it happens we won't need a mortgage to buy, but the point about reduced value comes up regularly when possessory title is discussed.

We had an occasion a few weeks ago when the vendor, who we believe is under pressure from other members of the family who stand to gain from the sale, refused to allow us to send any more tradesmen to the property to do estimates for work thrown up by the survey. She said that if we persisted in doing so she would take the house off the market. We really wanted that house so we complied.

Given the slightly parlous state of the title, I think I'd be emboldened to ask for a reduction this time on the basis you suggest, though we'd best have other properties in mind just in case the reaction is the same.  

GDB2222

Well, yes, I would certainly feel miffed, if I were in her position. She has concealed an important defect in title from the buyer, so you have agreed an inflated price. And, now you have found out! It must be so annoying for her. 

And, it’s no good her looking around for a different buyer, as there are very few 100% cash buyers around. 

desthemoaner

 I love sarcasm when its employed skillfully, and harmlessly. ;0)

We'll wait until possessory title is confirmed, then decide what to do.  Its not a good time to go looking for alternative properties, so chances are that we may struggle and our buyers might decide to look elsewhere. That would be a blessed and expensive nuisance after 3 months of conveyancing work,  surveys etc, but it wouldn't be the end of the world.