Flat Purchase with Possessory Title?

by Readers Question

16:11 PM, 6th August 2014
About 4 years ago

Flat Purchase with Possessory Title?

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Flat Purchase with Possessory Title?

My wife and I are looking to purchase a flat where the owners, who have lived there for c.25 years have managed to lose the deeds and also never registered the deeds with Land Registry. Flat Purchase with Possessary Title

Since our offer was accepted in April they have been working to prove that they legally own the flat, but following their efforts the best that the Land Registry will do is give them a “Possessory’” title.

This is along the lines of “squatters rights” and although they are offering to fund indemnity insurance our lendor may well not agree to give us the funds to go ahead.

Similarly, if they do agree we could face an issue when we come to sell the flat

Has anyone had experience of similar and is there a way to “upgrade” the registered title of a property?

Many thanks

John



Comments

Mark Alexander

16:14 PM, 6th August 2014
About 4 years ago

Hi John

Given that it is a flat there must be a freeholder and a management company, can they not help to prove ownership?
.

John Tattersall

16:19 PM, 6th August 2014
About 4 years ago

Reply to the comment left by "Mark Alexander" at "06/08/2014 - 16:14":

hi Mark,
From what we understand that the current owners have done that - there are only 4 flats in a converted Victorian house and the other 3 are all registered ok. As the sale has been dragging on we are keen to get possession but I wondered what we could do to change the Title ?
regards, John

DAVID BREWSTER

16:30 PM, 6th August 2014
About 4 years ago

Indemnity Insurance is available for this type of situation John.

David

Mark Alexander

16:33 PM, 6th August 2014
About 4 years ago

Reply to the comment left by "John Tattersall" at "06/08/2014 - 16:19":

Hi John

I agree with David Brewster above.

Another way to deal with this would be for them to apply for a lease extension. They would then have a new lease which could be registered. Alternatively, you could complete with title indemnity insurance and apply for the lease extension yourself.
.

John Tattersall

17:08 PM, 6th August 2014
About 4 years ago

hi David & Mark

the vendors have offered indemnity insurance which is ok - our concern was not knowing how widespread this issue was and if we should walk away from the deal (not let our heart rule our head).

Many thanks, John

Mark Smith (Barrister-At-Law)

17:28 PM, 6th August 2014
About 4 years ago

I would be happy to look over this situation, and give you free no obligation advice

Mandy Thomson

17:53 PM, 6th August 2014
About 4 years ago

It can be upgraded from Possessory to Good Leasehold after 12 years or earlier if the necessary evidence of title can be produced - see http://www.landregistry.gov.uk/professional/guides/practice-guide-42-upgrading-the-class-of-title.

However, I have checked with my partner, also a former Land Registry employee, who until recently liaised with mortgage providers. He agrees that it is likely to be difficult to get a mortgage with a Possessory or even Good Leasehold title.

Mark Alexander

18:18 PM, 6th August 2014
About 4 years ago

Reply to the comment left by "Mandy Thomson" at "06/08/2014 - 17:53":

Even with an indemnity policy?

I think it would be achievable, not too difficult in fact. That's what indemnity policies are for isn't it?
.

Mandy Thomson

18:44 PM, 6th August 2014
About 4 years ago

Reply to the comment left by "Mark Alexander" at "06/08/2014 - 18:18":

I know very little about mortgage indemnity policies. Generally, how expensive would it be, and are they normally accepted by mortgage providers (BTL and home loans)?

Mark Alexander

21:31 PM, 6th August 2014
About 4 years ago

Reply to the comment left by "Mandy Thomson" at "06/08/2014 - 18:44":

Yes they are usually accepted and generally cost a few hundred pounds. Almost certainly less than £1,000. Vendor usually pays as a condition of sale. Most policies are assignable too so they only need to be purchased once.
.

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