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.
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
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Member Since January 2011 - Comments: 12217 - Articles: 1412
4:14 PM, 6th August 2014, About 12 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?
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Member Since February 2014 - Comments: 5
4:19 PM, 6th August 2014, About 12 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
Member Since June 2014 - Comments: 9
4:30 PM, 6th August 2014, About 12 years ago
Indemnity Insurance is available for this type of situation John.
David
Member Since January 2011 - Comments: 12217 - Articles: 1412
4:33 PM, 6th August 2014, About 12 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.
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Member Since February 2014 - Comments: 5
5:08 PM, 6th August 2014, About 12 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
Member Since November 2013 - Comments: 252 - Articles: 10
5:28 PM, 6th August 2014, About 12 years ago
I would be happy to look over this situation, and give you free no obligation advice
Member Since November 2013 - Comments: 1130 - Articles: 2
5:53 PM, 6th August 2014, About 12 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.
Member Since January 2011 - Comments: 12217 - Articles: 1412
6:18 PM, 6th August 2014, About 12 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?
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Member Since November 2013 - Comments: 1130 - Articles: 2
6:44 PM, 6th August 2014, About 12 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)?
Member Since January 2011 - Comments: 12217 - Articles: 1412
9:31 PM, 6th August 2014, About 12 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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