Buying an unregistered property with no deeds

by Readers Question

3 years ago

Buying an unregistered property with no deeds

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Buying an unregistered property with no deeds

First post here and glad I found the site.

I have a conundrum and am about to walk away from an opportunity if there is no solution.

I have found a 3 bed detached house, in need of total renovation, with a house sized plot to the side, and garage at rear. It is a repossession. It was mortgaged by the current owner within the last 10 years IIRC. It would be a good deal, except for one problem. The garage is registered as sitting on part of the land to rear and side. This has the mortgage logged against it. However, the house sits on unregistered land, because it has been repossessed, it seems no deeds are available to cover the entire property. Buying an unregistered property with no deeds

This means that I would be buying a garage and access for the grand price of £275k. Too big a risk and not mortgageable, how it got one in the first place is beyond me.

Are there any options for buying it, registering it, maybe buying an insurance policy against an owner coming back and making a claim? Would it be mortgageable using this route, and would there be problems selling in the future?

Thanks in advance for any insights.

Regards

Naphar



Comments

Tony Atkins

3 years ago

Hello Naphar,

How did you find this property? Was it via a normal estate agency, or an auction house, or private sale? And if it's a repossession, surely the vendor is the original mortgage company? If so, I think you need to do more research into how a mortgage was secured if the main property was standing on unregistered land. Surely the mortgage company will have conducted their own enquiries, in which case you should insist that they provide you with the mortgage company's original conveyancing records, if available.

Also talk with the Land Registry and a good solicitor: the house has clearly been there for a long time, so you should have a good claim for possessory title on the unregistered land. Do you have any evidence of how long the property has been there? (Council tax records, planning records, photos taken by neighbours, etc)

I don't understand the argument that no deeds are available: something doesn't sound right here, because the lack of deeds should have nothing to do with the repossession. Mortgage companies rarely make loans without acceptable title, and anyway, the title deeds will be with the Land Registry and you can buy a copy of the title(s) and plot dimensions from them for £3 each. However the Land Registry's online records are not entirely reliable, so your best approach would be to ring the office that handles your area and talk with a member of staff.

Assuming possessory title is likely to be achieved, you should be able to get a mortgage, but you should check this with a mortgage broker as it may involve a specialist lender.

I would also check that you have valid access for the garage, especially if it involves using someone's private road.

Neil Harvey

3 years ago

Tony, thanks for the reply.
Its on with an EA. They are baffled and the mortgage co is not currently progressing it due to the issues, it seems. The agents claim that very little paperwork is available and the mortgagee may be missing, hence some of the difficulties.

Yes, you would think the mortgage company would be the vendor. But how can they sell something they do not have security over? The mortgage is secured against the garage deeds. The garage is defined in the deeds as being "to the rear of 5x xxxxx road".the garage sits on a piece of land bordering the land the house sits on. So technically, it seems to this lay person, that the mortgage company do not have security over the house.

If I understand correctly, title deeds are only with the land registry, of it has been registered. I paid my £3 to the land registry for a copy of the title for the garage, which shows the mortgage. Such a title doc for the house is not available!

The property must have been there 40 years plus. I could buy and take possessory title. But as I understand, I cannot take insurance for that until 12 months have passed. A risk I cannot take.

I don't see that anyone will take the risk. One option may be for the mortgage co to take posessory title, wait a year, take insurance, then sell?

The garage, IIRC, seems to have good access. But i would be knocking it down if plans came off, so no big issue anyway.

Thanks for your considered response. I think instructing a solicitor could be the only way to actually get somewhere.

Tony Atkins

3 years ago

Neil,

Have you spoken with someone at the Land Registry to confirm the land with the house on it is unregistered? Also visit the local authority to look at the planning history of the house: there won't be any online records so you need to visit in person after checking with the duty officer that there are in fact records. If the house has permission to be there, I see no reason in principle why you can't buy it.

You are welcome to contact me directly at antonyra1@onetel.com to discuss this further.

Neil Harvey

3 years ago

Thanks again. Will chase estate agent to find out what is currently happening, then look into digging further. Having had a look at the land registry website today, I may be able to do an index search which could help.
Interestingly, there seems to be a caution raised against first registration.
I think a case to leave in the hands of a solicitor to work out what is going on.

Tony Lilleystone

3 years ago

Please excuse late comment as I was otherwise engaged last week.

My guess would be that the mortgage company has thrown the deeds away as few if any of them now retain original deeds. That is their problem!

It is always up to the seller to produce evidence of their title. As the lender is selling the original mortgage deed would also have to be produced to show that the lender has a power of sale. When the title is not registered and original deeds are not available then there are ways of re-creating the title but this will take time and is an uncertain process.

Any buyer will now have to register title to the house on completion. So a solicitor acting for the buyer will need to ensure that the title offered by the seller is 100% OK and can be registered.

The caution against first registration complicates things even more – who has registered this? A buyer's solicitor will want to know that it is removed before completing.

When title is not registered and there are potential problems with the title most buyers' solicitors will now insist on the seller getting their title registered first before proceeding, to avoid any uncertainty as to whether the Land Registry will register after completion. How a lender can do this I do not know.

A solicitor acting for a mortgage lender is required to give the lender a certificate of title before drawing down the loan. No solicitor would be prepared to give such a certificate at the moment, so the property is currently unmortgageable.

Possessory title is a non-starter in this case, since the mortgage company cannot claim they have been in possession for 12+ years. The original owner might be able to do this but presumably they are not likely to be co-operative.

So in my view you will either have a long wait to see if the lender can somehow get the title registered or walk away.

Neil Harvey

3 years ago

Tony, thanks. That pretty much confirms some of my thoughts.
I have called the agent again. Whilst they are now turning away potential buyers so as not to waste time, they are being forced to keep advertising it. Strange situation. But the mortgage company seem to be trying to resolve the issues again. So a case of waiting to see what happens now.


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