2 properties on 1 set of deeds?!

Bradleym93

Hello,

First and foremost, thank you in advance for your advise and support. 

Myself and a friend are keen to pursue an auction lot which we have recently viewed. The lot includes, two, semi-detached properties, which if successful, would result in us owning one property each. Due to the properties being sold in one lot, we are aware (has been confirmed) both properties are registered on a single deed. We are keen to understand if / how the deeds can be amended, ensuring we legally own one property each? In addition to this, the properties in question are located in a conservation area, which we are mindful, may present additional obstacles.

Although still unclear, our initial research has indicated there could be challenges, specifically relating to; land registry approving our application, mortgage lenders agreements (significant decrease in value if plot was split) as well as comments made around stamp duty. If we can successfully negotiate a pre-auction sale, can amendments to the deed be made prior / upon completion to negate the risk of further challenges with our mortgage lender further down the line?

Again, thank you in advance for all contributions. 

Bradley

SDLT_Geek

Bradleym93 said:

Hello,

First and foremost, thank you in advance for your advise and support. 

Myself and a friend are keen to pursue an auction lot which we have recently viewed. The lot includes, two, semi-detached properties, which if successful, would result in us owning one property each. Due to the properties being sold in one lot, we are aware (has been confirmed) both properties are registered on a single deed. We are keen to understand if / how the deeds can be amended, ensuring we legally own one property each? In addition to this, the properties in question are located in a conservation area, which we are mindful, may present additional obstacles.

Although still unclear, our initial research has indicated there could be challenges, specifically relating to; land registry approving our application, mortgage lenders agreements (significant decrease in value if plot was split) as well as comments made around stamp duty. If we can successfully negotiate a pre-auction sale, can amendments to the deed be made prior / upon completion to negate the risk of further challenges with our mortgage lender further down the line?

Again, thank you in advance for all contributions. 

Bradley

If the two dwellings are bought as one lot it seems likely that the 3% surcharge to stamp duty land tax will apply (assuming the properties are in England).

If they are bought separately outside of the auction then the 3% surcharge will depend on the individual circumstances of each buyer.

Bradleym93

SDLT_Geek said:

If the two dwellings are bought as one lot it seems likely that the 3% surcharge to stamp duty land tax will apply (assuming the properties are in England).

If they are bought separately outside of the auction then the 3% surcharge will depend on the individual circumstances of each buyer.

Many thanks for your response. The fees associated to stamp duty are not too much of an issue, however if both houses were bought as one, stamp duty would apply, if obtained separately, due to the cost of each premises, there would be no fee. 

My real concern is understanding if title deed can be split upon completion of a sale or would it be recommended to do this once in full ownership of the freehold? If we were both on the original deed (2 properties on 1 deed) how could we successfully split the deed, transferring ownership of one of the properties to myself or friend?

Additionally, does the risk of refusal (splitting the deed) increase because the premises are located in a conservation area?

Thank you again!

user1977

Presumably your solicitor will be doing due diligence before you bid anyway, so you can ask them for advice.

Do you know why it's in an auction in the first place? Does it, for example, actually have planning consent to be used as separate houses? 

The title split would be easier if the vendor can be persuaded to do it at the point of sale - which would probably need to be a pre-auction deal.

theoretica

Assuming the title can be split - you would need to confirm it does not need planning permission or anything.

canaldumidi

Is this a traditional auction?

You are right to be querying all this up front- once the hammer drops you are committed, so you must by then have

* got all your finance organised, including firm mortgage offer (unless paying cash)

* checked the legals around the existing Title

* checked the legals around your proposed plans (to split the Title)

* checked the reason it's in an auction (often poor condition so get survey done), or some legal restriction

* checked with Planners you'll be permitted to do what you propose (esp as it's a conservation area)

No point bidding, winning then not getting a mortgage, or being able to develop the plot as you want.

But in theory it's staright forward to split a title (form TP1). Issue may be getting a mortgage for a 2 house plot, and having got it, then paying it off and getting 2 new mortgages, 1 each.

Have you read up the Conservation Area documentation? Spoken to Planners? Instructed solicitor? Had a survey done yet?

eg

Cuckfield Conservation Area Appraisal