08 December 2020
Five potential problems with your property title (and how to fix them)
The easing of lockdown restrictions, a buoyant property market, and the temporary savings on stamp duty mean now could be the ideal time to sell up and buy your next home. Getting the timing right could be more important than ever and, once you have accepted an offer, you will want your sale to progress smoothly and quickly.
Making sure the title to your property is in order will help keep your transaction on track, letting you and your buyer proceed with confidence. Ideally, you should do this before putting your home on the market but, whatever stage you are at, you should talk to your solicitor. They can identify potential title issues that could delay or jeopardise your sale and suggest ways to fix them.
Charlotte Ernest, associate, in the residential property team, looks at five possible title problems, which, unaddressed, could disrupt your plans.
Land Registry issues
One of the first things your solicitor will do is to obtain an official copy of your property’s title at H M Land Registry. This is proof you own the property, but your solicitor will also check whether it reveals anything which could become a problem. This could be something to do with your title or a potential registration issue. For example, sometimes the register contains a restriction which needs to be complied with. Failure to address this would prevent the registration of a new owner following a transfer, and your buyer is unlikely to proceed unless they can be sure they will be registered in turn.
Often a restriction requires the consent of a third party, for example, a landlord or management company. Fortunately, compliance is usually relatively straightforward, although it could delay matters if not addressed early on.
Occasionally it is not possible to comply with the restriction, and in these cases your solicitor may need to apply to the Land Registry for its cancellation or for an order to permit registration of the transfer.
Over 85 per cent of land in this country is registered, and your title is likely to be registered too. If it is not, then matters are likely to be more complicated.
Very rarely, title may not be registered because of an earlier failure to apply for registration. In this case, your solicitor should consider whether to seek a retransfer or an order to allow late registration. Until then, you will not have legal title and will not be able to complete your sale.
More often, property is unregistered because it has been in the same ownership for many years. Instead of being able to rely upon the Land Registry’s register, the buyer’s solicitor will need to examine the title deeds. This is a more complex process and, as there are now few solicitors who are experienced in or properly understand unregistered land, conveyancing may take longer. Choosing a solicitor with the right expertise will help and they may suggest applying to the Land Registry for voluntary first registration. This way, your buyer can rely upon your registered title and this will make the conveyancing process simpler and quicker.
Another advantage with registered land, is that there is much less likely to be a problem if deeds have been lost. Without the deeds, if your property is unregistered, it will be difficult to show you have a good title. So, you should make every possible effort to locate them.
If your deeds are lost and you cannot find them, your solicitor will try to reconstruct your title by gathering as much evidence as possible. They can then apply to the Land Registry for registration of your title. The Land Registry has a special procedure for these types of case, although this can be lengthy, so it is important to start the process as soon as possible.
Occasionally, a missing deed can be an issue even if your property is registered. This is because the register refers to rights or title restrictions contained in a particular deed, but it is not clear how they affect your property from the register or the records the Land Registry holds. If you cannot find a copy of the deed, you may satisfy your buyer by showing the right or restriction has not caused any issues in the past. Alternatively, your solicitor may suggest title insurance to allay any concern.
A restrictive covenant is a type of restriction which could affect your land for the benefit of nearby land. For example, it could stop you building on your land without first getting the consent of a person or company who has the benefit of a covenant. If you have breached this restriction, for example by extending your home without that consent, then you or a subsequent owner could face legal action. The person or company who has the benefit of the covenant could seek compensation or the removal of the extension, a risk which could worry your buyer.
The register of title, or your deeds, should show whether any restrictive covenant affects your property. If there has been a technical breach, you will have different options depending on the circumstances. For example, you may be able to prove the restriction is no longer enforceable or apply for retrospective consent. Title insurance is another possibility and, for a small cost, can be a pragmatic solution, allowing your sale to proceed without undue delay.
Rights of way and other easements
Your buyer will want to know about any rights your property is subject to and to make sure it has sufficient rights for his intended use. For example, problems sometimes arise with shared driveways. One property may include the drive, but the other property has no legal right over it. Where neighbours are amicable, it may be relatively straightforward to change the legal documentation to reflect the position on the ground. This will inevitably take some time, especially as you may also need the consent of any mortgage lenders and is best addressed early on.
Hopefully, your property will not have any title defects. Even if it does, very few problems are insurmountable, and a good solicitor will help find solutions to keep your sale on track.