Property with Possessory Title for most of the garden

randompenitent

Hi,

We're thinking of making an offer on a property where most of the back garden has Possessory Title, granted a couple of years ago, apparently on previously unregistered land.  The main part of the property, which is where the house itself stands, has Title Absolute.

What are the risks here? Presumably someone could appear with paper title deeds and claim the garden.  It's not a huge area, access is difficult and I suspect that planning permission for any development on it would be problematic but its loss would be pretty disastrous for the house.

I've heard of indemnity insurance, but how would this actually help?  What does the insurance pay out on?  

I'm about try to have a conversation with a solicitor/conveyancer about this but I would be grateful for all knowledgeable input and experience.

Thanks!

RHemmings

An insurance policy may help with legal costs involved in defending a claim of the land, and/or compensate you for loss of value of your property if the land is lost. At least that's the typical way that indemnity insurance works. 

Note that these are quite large amounts of money, and the insurance is typically inexpensive. That's only possible because situations where the insurance would pay out are rare. 

babyblade41

We sold our last house where part of the garden had possessory title (executors didn't know the property and mistakenly registered it incorrectly

It wasn't until my solicitor showed me the title and I noticed it was wrong. (check all docs your solicitor asks you to do as after completion it makes it a whole lot harder ) that we had to apply for adverse possession.


LR are very good at investigating any claims and there are many timed steps you have to go through to get to the bottom of it.

An onsite visit by a surveyor, all documentation as evidence is checked and double checked, then a notice to surrounding properties (letters sent to neighbouring properties if there are any objections) which have a timed  response 

After all this then the LR will either agree to register with a possessory title or not, any doubt and it's not granted .

An indemnity police should be enough to assist if the worst thing happened and  I would want to know what happened and how/why this was an unregistered piece of land.

It would't put me off buying a property with partial garden possessory title 

ETA cost of the indemnity insurance wasn't expensive 

LHW99

We have had to obtain this, and it helps if you have dated evidence that you have used the land as part of your property for a specific amount of time (12 years? 20 years? )

housebuyer143

If you are getting a mortgage it may prove problematic because they will be unlikely to agree to lend on the value based on you having the land. They would likely value it on the basis that the land was not included.

annetheman

housebuyer143 said:

If you are getting a mortgage it may prove problematic because they will be unlikely to agree to lend on the value based on you having the land. They would likely value it on the basis that the land was not included.

This isn't the case for most lenders as long as the possessory Title doesn't have any accessway, easement or structure on it (i.e. the house). Can check for your specific lender on the lender's handbook:


OP I am in the process of purchasing a house where seller is applying for possessory Title (has been since June...). To your query about what the risks are, I personally think they are relatively low if the possessory has been granted on previously unregistered land.

Someone would have to have a better claim than the sellers, which is highly unlikely given the extraordinary hoops you have to jump through (aforementioned by someone else) to be granted the possessory Title following much LR scrutiny and an Ordnance Surveyor visit to confirm with their own eyes it is true you are the only one with access, plans submitted are accurate, and you have been able to use it as your own undisturbed as if you were the owner.

The house I'm buying has fenced-in unregistered land with no structure or easements on it, 20+ years of lettings agency photos of said fence, and is a terraced house garden, making the area inaccessible to anyone but the seller.

Application should have been very straightforward but during LR requisitions of the evidence and statutory declaration, solicitors let the application lapse.... hence we are on application number 3 after OS visit...

When I first found out about the issue, I weighed up the risk of someone claiming it and it's low enough that I don't mind. I did also get a good reduction in price, enough that I didn't ask again once this issue reared its head.

I also asked my lender if the valuer thinks its worth less due to it - they said no.

Only thing I wish is that for your sake the Title trail doesn't cause hideous delays, especially because the Title has already been granted. I am 8 months into this purchase, living with dad after selling my previous home, it is taking that long...

You can ask for indemnity insurance but it'll be invalidated if you apply for Absolute Title (obviously) which you can only do 12 years after possessory was grants -- if you're looking to be there long term, that'll close the loop for you in terms of any future claims. Good thing is, since granted a few years ago, countdown already began and the time accumulates between owners.

Good luck!

annetheman

Sorry forgot to add - indemnity insurance generally will pay out the value lost if someone successfully claims the land. 

e.g. If the land was worth £250,000, someone successfully claims the possessory bit, now it's worth £200,000. They will in theory pay the £50,000 loss (usually it is index-linked, so the value at the time of the claim). As with all types of insurances there are going to be a myriad of ifs, buts, and onlys to navigate before they pay, such as any proof there was knowledge of the likelihood of a claim, or the owner (if it was registered) did give permission to use the land before possessory was sought, or you apply for Absolute, etc.

randompenitent

Thanks to everyone who responded.  Having spoken to a couple of lawyers, I think we will probably go ahead.