Indemnity policy suggested by solicitor!!

verax5

Hi,

I had an offer accepted on a property.

Seller has probate granted.

My solicitor just emailed me this morning that I need to have: Indemnity policy.

This is because seller is selling property with "no full title guarantee".

My question is:

1. Will this prevent me from doing loft conversion or building another small room on top of extension, which at the moment our local council allows for semi houses in the area.
2. Will this cause trouble when refinancing the property…?
3. When we have our deeds registered, will we get "Absolute" title..?

POLICY DETAILS BELOW:

The policy solicitor sent me is this:

Residential real estate, specific risk policy.

1 Insured event(s) Excess: Limitation

• Limited or No Title Guarantee
• Someone else challenges your ownership of the Property because your seller has
  not provided full title guarantee

Additional uninsured matter(s):
0 Any matters revealed in the official search at the Land Registry, covering the completion date.

• Applicable to: Limited or No Title Guarantee
• Any outstanding charges registered against the title at the Policy Commencement Date.
• Applicable to: Limited or No Title Guarantee

Insured use:

• Continued use of the Property as a single, residential dwelling (which description includes a flat) including any buildings and land used as part thereof, as constructed and existing at the Policy Commencement Date

mebu60

Are you not paying your conveyancing solicitor to answer these sorts of questions?

silvercar

The answer to point 3 is no. That is why you need the indemnity guarantee. Your solicitor will also need to check your lender is happy with this. Id also be asking the sellers why there is no absolute title.

verax5

https://forums.moneysavingexpert.com/discussion/comment/82131291#Comment_82131291

I have sent them questions but it's type of solicitor that don't charge unless sale goes through so wanted some impartial advice. Thank you

Land_Registry

You may wish to seek clarification from your solicitor as 'title guarantees' are not linked to the class of title, absolute, for example.

Our own online guidance re title guarantees states the following with regards how to complete the form TR1 (transfer) used by the seller/buyer to complete the sale/purchase/transfer

In providing these guarantees the transferor(s) give certain binding promises about their title to the property. There are two types, though either may be modified. These guarantees impose obligations, which will continue to bind the owner even after completion of the transfer. This area is complex and if you have any doubts we recommend you seek the advice of a solicitor or other professional, as we cannot provide you with legal advice.

The types of guarantee are:

• Full title guarantee: the transferor(s) guarantee, to the best of their knowledge, that there are no financial charges/encumbrances (such as mortgages) or other third party interests (such as rights of way/leases) which affect the property other than those already revealed to the transferee(s)
• Limited title guarantee: 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 that still exists at the date of the transfer.

Complete this panel by selecting the title guarantee, if any, to be given by the transferor and add any necessary modifications to that guarantee.

artyboy

https://forums.moneysavingexpert.com/discussion/comment/82131449#Comment_82131449

it might be stating the obvious, but I'd be very quickly ditching a solicitor if I didn't have full confidence that they were representing my interests. If you have reason to think that the 'no sale no fee' arrangement is compromising their advice to you then this is more than just about an indemnity policy!

mebu60

https://forums.moneysavingexpert.com/discussion/comment/82131449#Comment_82131449

Impartial advice is exactly what you will / should get from your solicitor who is obliged to look after your interests. Whether there is a subsequent sale or not and they get paid or not should be immaterial. If you don't trust that they might advise against a purchase if circumstances warrant it I would be going elsewhere. If you withdraw from this purchase you are highly likely to find somewhere else so they will get to collect their fees eventually. I suspect it is not uncommon for them to have sales fail to progress. I expect that scenario is built in to their rate.

mlz1413

I had this on a house purchase in the 1990s, the terrace house had a garden that had been a house previously (approx 60-100 years before).

Apparently there had been 2 rows of back to back houses. The houses facing the main street stayed, the ones behind where demolished. But nothing else was built just the land claimed as gardens and access.

The indemnity was recommended encase someone with deeds to a demolished house ever wanted to claim the land. The policy was optional and I refused against solicitors advice. But I spoke to the neighbours who had 100 years of history and made my own choice.

I think maybe in your case the family of the probate house are not willing to give absolute guarantees on the house. So it needs to be asked why they don't know.

It could be that the person who died didn't have children and the family member/s don't know.

But if this is a family home with children selling a parents house that has been owned a long time I would be concerned.

HHarry

I sold my Mums house with a limited title. It was explained to me that this wasn’t unusual, as I had never been the owner and therefore couldn’t be expected to know the complete history of ownership.

I filled out the TA6 to the best of my ability.

The Buyers didn’t bat an eyelid, and idemnity insurance was never mentioned.

GoogleMeNow

https://forums.moneysavingexpert.com/discussion/comment/82135567#Comment_82135567

When first reading OP's post, I thought exactly the same as you HHarry, as probate properties are generally sold as "limited title guarantee" because an executor selling the property may not be able to answer enquiries or provide any warranties/guarantees etc.

However, OP states that the property is being sold with "No full title guarantee", so I'm wondering whether that's why the indemnity policy is being suggested. Perhaps there are grey areas over ownership or maybe it's not a probate property but a repossession where any defects in the title are not known by the lender in possession and you have no case against them later on when you discover what those defects are, but I'm not a lawyer so take that with a pinch of salt.