Possessory title and mortgage

[s4suk]

Hi,

I'm in the middle of purchasing a house and thought it would be a simple purchase as there is no chain involved. However, my solicitor has been in touch to say the title deeds on the property are classed as possessory rather than absolute as they may have been lost in the past. She has requested that the sellers solicitor upgrade the title in order to satisfy my mortgage company (ING Direct) otherwise they will not honour it.

From my understanding you can not simply upgrade the classification as you have to wait 12 years from the date the title is classed as possessory provided no one contests the deeds. I'm worried that my mortgage offer is going to be withdrawn based on this. Any one have any experience of this matter that can offer some advice?

[TooLateForAName]

Defective title insurance?

How long have they been there?

[Fas1975]

Went through something scarily similar a couple months ago. Had some title issue with part of the land on the property I was buying. My solicitor requested the seller to put in place a tailored indemnity which protects you from any financial loss incurred if anyone in the future contests title. It's a lifetime policy and only needs upgrading if you sell the property in the future and the value of the property has risen in value. Otherwise it's fully transferable.

Once this indemnity was in place, the solicitor sent the policy and supporting documents to the mortgage company as they had final approval. The mortgage company (Santander in my case) reviewed the docs and were happy and validated the mortgage.

As long as you have a good solicitor / conveyencer, then it's not an issue. I paid a LOT for mine, used a proper solicitor firm and not an internet company. It's worth it.

I'm still unpacking, but if you need, I can dig out the company that provided the indemnity policy.

[s4suk]

Thank you for the replies.

I think they have been there since 2006. I'm not sure whether the house is affected or just the land or part of the land. I think indemnity insurance is the way forward but I just hope my lender is willing to accept this.

Am I in a position to re-negotiate price if I can move forward from this?

[DS3R]

s4suk said:

Am I in a position to re-negotiate price if I can move forward from this?

Unlikely. For the simple reason there are simple ways around it. You can ask the other side to pay the cost of the insurance policy, but if they’ve lived there for that long, they will probably have been through the same thing when they bought the house.

I’ve recently sold a house with part possessory, the buyers needed no mortgage, so had their solicitors advice to rely on, and no-one elses’s rules. He said “no problem”, so no problem existed.

They asked me to pay for their insurance, which I declined. I bought the house ~ 2 years earlier & knew there was part possessory, and I didn’t take insurance. So I didn’t feel the need to pay insurance for someone else, for a risk I had assessed, and I decided did not need insuring against. My lender (high street bank, loan was in 4% stamp duty territory) did not ask for insurance either.

The insurance policy I was asked to pay was about £130 by the way. It covered approx 0.2 of an acre. The registered element of the property was 0.15.