Would you buy a house with this boundary issue?

NordicNoir

Sort of a hypothetical question….

Facts: A freehold house on a small private development pays service charges for the upkeep of roads, drains, woodland etc. When the property was originally transferred, a mistake was made on the plan so that a 2m x 15m part of the back garden is still owned by the management company. The management company will be handed over to the residents shortly, “so there is no real risk to the homeowner if they never actually get it amended at the Land Registry” (the developers opinion).

Would you be happy buying a house like this or would you demand that the seller gets it corrected at the Land Registry before you buy? Interested to know your thoughts, thanks!

silvercar

It needs sorting. All the transfer does is move the part of your back garden to the residents as a group rather than the management company. How crucial is this piece of land? Is it a strip at the side of your property or a key part of the back garden?

it actually raises two issues. Who will own the piece of land and could they have access to it and who will manage the services that the management company previously managed?

WIAWSNB

Most likely you need to sort it, as I suspect an indemnity policy won't cover this as all the parties know about it.

An alternative could be, if you are prepared for the possibility of never having that strip, then agree a commensurate price for that risk, and ask for it to be deducted from the asking price. Then, once you get the strip, it'll be a bonus. But not if you don't. But you likely will. Although there's a chance...

Q - is that strip currently fenced in to the garden? Ie, everyone acknowledges its 'rightful' owner?

NordicNoir

silvercar said:

It needs sorting. All the transfer does is move the part of your back garden to the residents as a group rather than the management company. How crucial is this piece of land? Is it a strip at the side of your property or a key part of the back garden?

it actually raises two issues. Who will own the piece of land and could they have access to it and who will manage the services that the management company previously managed?

The land is totally contained within the back garden which no one else can access. It was a case of the plan showing the fence/wall in the wrong position when it was registered. In the eyes of the Land Registry, it looks like there is an alleyway between two properties whereas in reality there is not, it is just a fence/wall between two properties. 

Sorry, I have been unclear - the management company will remain, but currently the only directors/members are the developers, they will then resign and the residents will become members, and some of them will be directors. The management company remains the owner of the land and effectively the residents will own the management company.

NordicNoir

Thanks for your comments, it is not my house or one that I want to buy. It is one that is on our development and I am working on getting all of the information together that we will need to run things after the handover, starting with looking at what land does the management company actually own. I am beginning to doubt myself (after pressure from the developers) and wanted to see how anyone would view buying a house in this situation!

gwynlas

I would expect the plans to be amended showing correct boundaries as part of the conveyancing process.

caprikid1

"2m x 15m" is a lot to lose if the the new management committee decided they wanted to correct the boundaries.

If I was the home owner I would be wanting this rectified as a matter of urgency.

Grumpy_chap

The error needs to be sorted.
The step may be inaccessible, but no guarantee that a future occupier of the next adjoining plot sets eyes on the strip or part thereof.  Could be useful for a shed.