Landlocked property

user1977

ThisIsWeird said:

user1977 said:

HHarry said:

GDB2222 said:

I agree. I have not seen the premium quote for this particular issue, but a lot of indemnity policies are remarkably cheap, which means that they  must be structured so that the chances of a successful claim are practically nil. 

 It might not be that the chances of a successful claim are nil, more that their definition of success may be different.

I’ve had a look at my policy (for a different issue), and whilst I’d love to think that they’d fight my case all the way to the highest court in the land, other remedies are to chuck the 3rd party a few quid to see if the problem goes away, or compensate me for the loss of value.  It is their discretion which remedy they choose, and undoubtedly they will use whichever is cheapest for them, but that might not align with what I’d want.

In practice with this sort of situation, the other party is most likely just to want some cash in return for formalising whatever the de facto position is. So the insurers negotiate that as a solution.

Would you consider this purchase a goer, assuming the indemnity policy will cover the value of the property - worst case scenario? And assuming the IP is watertight, of course.

As I said above, my concern here is that the neighbour is family of the seller, and I would worry that in the event of a claim the insurers might think something fishy had been going on.

Also unlike many other cases we discuss here, this one is fundamental to the marketability of the property (unless a future buyer gets a helicopter!) with an identifiable burdened owner, not merely e.g. losing a bit at the bottom of the garden with vague ownership history. So I think buyers/lenders will be very cautious even with watertight insurance.

Herzlos

I'm not sure an indemnity policy would do anything here anyway; because the landowner already knows the landlocked property has unofficial access.

And without anything official in place, no policy is going to be able to do anything if the landowner leaves a pile of logs obstructing the access.

I wouldn't touch this unless you've got absolutely watertight confirmation of access.

ThisIsWeird

Herzlos said:

I'm not sure an indemnity policy would do anything here anyway; because the landowner already knows the landlocked property has unofficial access.
And without anything official in place, no policy is going to be able to do anything if the landowner leaves a pile of logs obstructing the access.
I wouldn't touch this unless you've got absolutely watertight confirmation of access.

Yes but no but...

Seemingly, the homeowner has had access since the land was split in '63. And seemingly the vendor is claiming that this right should continue. And, the vendor is happy to provide a SoT to the effect they've had unhindered access in excess of 20 years. And, the vendor is seemingly willing to take out an indemnity policy to cover any resulting issue resulting in a loss of this access.

Looking at all that from purely the potential buyer's angle, provided the IP is watertight (and I would have a specialist property solicitor check it over), the rest is largely moot. I think?

The buyer can only take what they are told on the word of the sayers - and ensure it's in a recordable manner. It'll either be that the vendor is being frank and honest, in which case the IP is valid, or the vendor is being F&H, but the landowner fancies chancing their arm afterwards - in which case the IP is still valid. Or, if the vendor and landowner are colluding on this issue, then that will almost certainly become a criminal matter - if proven. If it ain't proven, the IP is valid. 

What happens after purchase is between the IP provider and the landowner. Provided the IP covers the full value of the property, the very worst case scenario is that the house stands on the landowner's land in perpetuity, without even the landowner being allowed to access it. The buyer is fully indemnified to the value of the house - they ride off into the sunset and buy elsewhere.

In theory.

In practice, the IP provider will try and arrive at a compromise solution, presumably making it clear to the landowner that they will have nothing to gain by being greedy - they will end up with nothing, other than a house they don't own sitting on their land*. And, if the SoT is considered to be not a SoT, the possible investigation of attempted fraud.

*Fun and games. When the unlived-in house requires work - as it regularly will - the owner will presumably have the right to access the 'neighbouring' land in order to carry out this work. 

user1977

Herzlos said:

I'm not sure an indemnity policy would do anything here anyway; because the landowner already knows the landlocked property has unofficial access.

And without anything official in place, no policy is going to be able to do anything if the landowner leaves a pile of logs obstructing the access.

No, I wouldn't agree with that. You can get insurance for this sort of situation. Not as straightforward as "we've been using the access for 50 years and nobody knows who owns it" but it can be insured.

EssexHebridean

My understanding is that the reason indemnity policies are so cheap really is as simple as the rarity of them paying out - far below the level that is expected from pretty much any other insurance. So it’s a product which a lot of is sold, but only a tiny fraction of a percentage of the policies ever end up costing the providers anything. Something which if it IS needed, becomes well worth not only its actual cost, but would still turn out to be good value even if it was 10x the cost, or even more. It’s just that almost everyone who buys one simply never will need it! (And of course because they ARE cheap, that is another reason why more are sold, too.)

MysteryMe

Let's think through what in how a real life scenario is likely to pan out in a worse case scenario.  In a dispute waving a piece of paper containing an Indemnity Insurance is not going to solve anything in isolation. It will involve lengthy and costly litigation which may or may not be successful and may or may not be covered by said bit of paper either in part or entirety.

Even if you do happen to get a judgement in your favour of £X you have the small matter of actually getting any money. If the "guilty" party becomes bankrupt or has disposed of assets somehow (and remember this is civil action, the powers are nowhere near those of criminal legislation) you could very easily still end up with a house worth next to nothing and constant dispute with a neighbour. Also remember that there is the expectation that the injured party has done all they can to mitigate their loss. Going ahead gung ho on the basis that you have paid £100 for a insurance policy may not pass that test so you may not even get all "loss" awarded.

Until the vendor has sorted the access issue through the correct legal process, the OP would be crazy to proceed. It is a huge red flag that the vendor is not willing to sort this matter out, when as others have pointed out it is the most obvious course of action to take. I think it smacks of a family falling out and the OP should swiftly be removing themselves from the cross fire IMO.

Statex2_2

Thanks for all the replies and advice. There has been a development. The estate agent has phoned me and stated that the seller needs to proceed as they may lose the house they have made an offer on. I replied that I needed an easement registered at  the land registry making the access official. He came back and said that the vendor had contacted his solicitor and the process would take too long 3 months plus and he would lose the proerty he wanted to purchase.

user1977

Statex2_2 said:

Thanks for all the replies and advice. There has been a development. The estate agent has phoned me and stated that the seller needs to proceed as they may lose the house they have made an offer on. I replied that I needed an easement registered at  the land registry making the access official. He came back and said that the vendor had contacted his solicitor and the process would take too long 3 months plus and he would lose the property they wanted to purchase.

No particular reason why it ought to take "3 months plus", but anyway sounds like they'll need to accept they can't buy their dream property if the property they're selling is currently unmarketable...

Statex2_2

I contacted an independant solicitor today who said that the 20 year rule for prescriptive permission may not apply because the owners knew about the access and issued a licence to use it. (Re: the 1963 agreement allowing the owner to use the track) He said that someone has to use an access for over 20 years with no objection and without the other party knowing about it, if that makes sense. Should it be brought to the attention of the land owner the 20 year rule does not apply. He also said that if the owner of the land challenges our right of access we would be unable to sell the house or obtain a mortgage on it. Basically he said I should walk away from it.

Herzlos

Statex2_2 said:

Thanks for all the replies and advice. There has been a development. The estate agent has phoned me and stated that the seller needs to proceed as they may lose the house they have made an offer on. I replied that I needed an easement registered at  the land registry making the access official. He came back and said that the vendor had contacted his solicitor and the process would take too long 3 months plus and he would lose the propwerty they wanted to purchase.

It sounds like the seller needs to be quick trying to make an agreement with his cousin (?) about getting you some kind of official access or selling that bit of land. I'm sure if he wanted to he could get something rolling in time to keep the house he has offered on.

I still wouldn't be touching it unless your solicitor has confirmed you have unhindered access.