Limited title guarantee (auction)

Kss_1988

Hi, first time posting, hoping people can help. 

I am looking at a plot of land at auction with a low guide price due to limited title guarantee and no planning permission.

I have had a planning policy report done and a solicitor to look over the auction pack. 

The land is being sold by a Ltd company as a parcel of a collection of land with limited title guarantee. I know what this means in a legal sense but what does it mean practically? 

- can I get apply for full title? 

- can I get planning permission to develop in the meantime? 

- can I build on the land and sell the house(s) I build ans would these have full title? 

How big a risk is this in practical terms? 

Thanks,

FarmGirl78

Do you know the history of the land?

My house is leasehold with the same issue. The house was built 140 years ago, the (limited) leaseholder who I pay my ground rent to died about 20 years ago (his solicitor still collects the £1.20 ground rent though!). In this case the odds of someone turning up with documentation to say they own the land is minimal. The indemnity to bail us out if needed was about £45 but as yours is land you want to build on matters night be completely different.

As it is my neighbours in the same situation have built an extension which would obviously need permission of the land owner. Theres no-one to ask so I've no idea what they did, but the extension got planning permission and got built.

The above anecdotal evidence may be no use to you whatsoever, but its all I have to offer!

eddddy

Kss_1988 said:

- can I build on the land and sell the house(s) I build ans would these have full title? 

,

I'm no expert on this, but my understanding is that you could still be able to sell with full title guarantee. But you've instructed solicitors, so you should ask them...

Full Title Guarantee: The transferor(s) guarantee, to the best of their knowledge, that there are no financial charges/encumbrances (eg mortgages) or other third party interests (eg rights of way/leases) which affect the land other than those already revealed to the transferee(s).


Limited Title Guarantee: Limited title guarantee is a more restricted set of promises by the transferor(s). This guarantees that the transferor(s) have not themselves created, or allowed to be created, any charge, encumbrance, or third party interest, which still exists at the date of the assent.

Link: https://www.gov.uk/government/publications/whole-of-registered-title-assent-as1/guidance-how-to-complete-form-as1

Kss_1988 said:

can I get planning permission to develop in the meantime? 

You can apply for planning permission.

But what makes you think you might get planning permission for the land? Have you discussed this with the planning authority or a planning consultant?

If the land has development potential - for building multiple houses - there will almost certainly be lots of professional developers interested.

It might be hard for you to compete with them, as they'll probably have a much better idea of development potential, and access to cheaper resources for building, and much more experience of building generally. 

Simonon77

Have you checked if any planning applications have been made before? If a company is selling it without planning permission you can be pretty sure you would have no chance of getting it. Seeing as they could ask 10 - 20x more for land with permission in place, why would they not just apply themselves and sell it for a lot more 

FreeBear

Kss_1988 said: - can I build on the land and sell the house(s) I build ans would these have full title?

Have you checked for any restrictive covenants ?

There could be one in place preventing any building being erected and/or permission sought from the covenant owner (for a fee).

propertyrental

Kss_1988 said:

- can I get apply for full title?  Of course you can apply. Doubtful you will get it without difficulty

- can I get planning permission to develop in the meantime? You can certainly apply - but will the LA grant? The seller has probably considered this and would have applied for PP and sold with the consent if it was likely. Have you examined the LA Planning Strategy? Spoken to a LA Planning Officer? Or a private Planning Consultant?

- can I build on the land and sell the house(s) I build ans would these have full title? You can build on it if, and only if, you obtain Planning consent. Thereafter you can sell, probably offering the buyer an indemnity insurance for the limited Title.

How big a risk is this in practical terms? Pretty big. But if the land is cheap enough, and you've done full due diligence, youcould take a gamble.

Remember auction guide prices bear little connection to actual sale prices (which might be much higher or much lower). So before the auction, have a clear idea of your top bid price, and stop bidding if the land reaches that!

Thanks,

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