Buying a house with part possessory title
Discussion
So here is a weird one.
Buying a home with no onward chain - it has come to light that there is a strip of land running *through* the house that is not registered to the owners. The house has been massively extended, so originally the strip of land in question ran alongside the house, but now the extended house sits on top of it, and effectively straddles the two chunks of land which are registered to the property.
Sellers have lived in the property for 30 years, and were responsible for building the extension. The strip of land in question was formerly a ditch that has been filled in, and the sellers claim they saw the old ditch when they dug the foundation for the extension (early 90s).
So, now I have come to buy the property, and the seller's solicitors are saying they need to apply for adverse possession of the land to gain a possessory title. They have started the application process, and await the 65 days for any response from a land owner.
Can anyone advise if this is going to make things difficult in finalising a mortgage on this property? We have the offer from Nationwide, but will part of a title being possessory be an issue to a lender? My assumption here is that this will need to be covered (at the sellers expense) by an index linked indemnity policy. Should I be renegotiating the price down?
Buying a home with no onward chain - it has come to light that there is a strip of land running *through* the house that is not registered to the owners. The house has been massively extended, so originally the strip of land in question ran alongside the house, but now the extended house sits on top of it, and effectively straddles the two chunks of land which are registered to the property.
Sellers have lived in the property for 30 years, and were responsible for building the extension. The strip of land in question was formerly a ditch that has been filled in, and the sellers claim they saw the old ditch when they dug the foundation for the extension (early 90s).
So, now I have come to buy the property, and the seller's solicitors are saying they need to apply for adverse possession of the land to gain a possessory title. They have started the application process, and await the 65 days for any response from a land owner.
Can anyone advise if this is going to make things difficult in finalising a mortgage on this property? We have the offer from Nationwide, but will part of a title being possessory be an issue to a lender? My assumption here is that this will need to be covered (at the sellers expense) by an index linked indemnity policy. Should I be renegotiating the price down?
devnull said:
So here is a weird one.
Buying a home with no onward chain - it has come to light that there is a strip of land running *through* the house that is not registered to the owners. The house has been massively extended, so originally the strip of land in question ran alongside the house, but now the extended house sits on top of it, and effectively straddles the two chunks of land which are registered to the property.
Sellers have lived in the property for 30 years, and were responsible for building the extension. The strip of land in question was formerly a ditch that has been filled in, and the sellers claim they saw the old ditch when they dug the foundation for the extension (early 90s).
So, now I have come to buy the property, and the seller's solicitors are saying they need to apply for adverse possession of the land to gain a possessory title. They have started the application process, and await the 65 days for any response from a land owner.
Can anyone advise if this is going to make things difficult in finalising a mortgage on this property? We have the offer from Nationwide, but will part of a title being possessory be an issue to a lender? My assumption here is that this will need to be covered (at the sellers expense) by an index linked indemnity policy. Should I be renegotiating the price down?
What is your Solicitor saying?Buying a home with no onward chain - it has come to light that there is a strip of land running *through* the house that is not registered to the owners. The house has been massively extended, so originally the strip of land in question ran alongside the house, but now the extended house sits on top of it, and effectively straddles the two chunks of land which are registered to the property.
Sellers have lived in the property for 30 years, and were responsible for building the extension. The strip of land in question was formerly a ditch that has been filled in, and the sellers claim they saw the old ditch when they dug the foundation for the extension (early 90s).
So, now I have come to buy the property, and the seller's solicitors are saying they need to apply for adverse possession of the land to gain a possessory title. They have started the application process, and await the 65 days for any response from a land owner.
Can anyone advise if this is going to make things difficult in finalising a mortgage on this property? We have the offer from Nationwide, but will part of a title being possessory be an issue to a lender? My assumption here is that this will need to be covered (at the sellers expense) by an index linked indemnity policy. Should I be renegotiating the price down?
Sarnie said:
What is your Solicitor saying?
Solicitor is out this week - the locum hasn't been much help and has been entirely generic in their response. I wanted to make sure I had a modicum of an idea of what was going on before I talk to them.Solicitor has originally stated that this would have been a paper exercise to transfer the title deeds to me, but now that the sellers solicitors are applying for adverse possession suggests to me that they can't trace the owners. All I've seen from the LR screenshots is that the land is called 'land lying to the north of x avenue, ytown"
devnull said:
So here is a weird one.
Buying a home with no onward chain - it has come to light that there is a strip of land running *through* the house that is not registered to the owners. The house has been massively extended, so originally the strip of land in question ran alongside the house, but now the extended house sits on top of it, and effectively straddles the two chunks of land which are registered to the property.
Sellers have lived in the property for 30 years, and were responsible for building the extension. The strip of land in question was formerly a ditch that has been filled in, and the sellers claim they saw the old ditch when they dug the foundation for the extension (early 90s).
So, now I have come to buy the property, and the seller's solicitors are saying they need to apply for adverse possession of the land to gain a possessory title. They have started the application process, and await the 65 days for any response from a land owner.
Can anyone advise if this is going to make things difficult in finalising a mortgage on this property? We have the offer from Nationwide, but will part of a title being possessory be an issue to a lender? My assumption here is that this will need to be covered (at the sellers expense) by an index linked indemnity policy. Should I be renegotiating the price down?
Possessory title means that you have no paperwork to prove ownership, but you are in undisputed possession of the land. This could be as simple as the deeds to a house being lost. Buying a home with no onward chain - it has come to light that there is a strip of land running *through* the house that is not registered to the owners. The house has been massively extended, so originally the strip of land in question ran alongside the house, but now the extended house sits on top of it, and effectively straddles the two chunks of land which are registered to the property.
Sellers have lived in the property for 30 years, and were responsible for building the extension. The strip of land in question was formerly a ditch that has been filled in, and the sellers claim they saw the old ditch when they dug the foundation for the extension (early 90s).
So, now I have come to buy the property, and the seller's solicitors are saying they need to apply for adverse possession of the land to gain a possessory title. They have started the application process, and await the 65 days for any response from a land owner.
Can anyone advise if this is going to make things difficult in finalising a mortgage on this property? We have the offer from Nationwide, but will part of a title being possessory be an issue to a lender? My assumption here is that this will need to be covered (at the sellers expense) by an index linked indemnity policy. Should I be renegotiating the price down?
This was the background for me when I bought a house with posessory title. The previous owners had put declarations and witness statements in place to prove possession 10 years prior to my purchase and the possessory title was recorded at the land registry.
My solicitor advised that some mortgage providers would not accept possessory title (they described it as defective title). In the end my lender had no problem with it and the seller already had a title insurance policy in place which they paid to transfer to my name,
Once the posessory title had been registered for 12 years, it was a simple matter to upgrade it to full title.
Unfortunately, the situation you describe is more complex. The seller does not actually have possessory title. By the sound of it, the land is unregistered, so not theirs to sell. In other words they have built on land they do not clearly own.
The documents I saw for my house were not straightforward and I would not assume that your seller can get this sorted. If you give the the opportunity, your purchase is going to be delayed.
My advice is to walk away. At this point the situation is a mess and the vendor does not have a property to sell. They may be able to sort it, but I would not gamble on it.
Elysium said:
My advice is to walk away. At this point the situation is a mess and the vendor does not have a property to sell. They may be able to sort it, but I would not gamble on it.
IMO, that is your only option.I struggled with something similar, except my solicitor discovered that part of 'my' property was unregistered after i completed on the purchase. It took 18 months to resolve.
Successfully gaining adverse possession will take them months to sort out.
Not related to the title, but why was the ditch filled in? I live in an area where there are ditches to remove surface water and some have been filled in and those properties tend to have more issues with flooding than others. I would check the ditches around the area and ensure that the water is going somewhere
The ditch was removed in the late 70s where land was converted from farmland and rev developed into housing that it is today. There are huge flood defences in place near by, and I’ve lived in this area for 10 years, so I am less worried about flooding. I’ve seen the reports from the searches.
The ditch markings stretches a mile of so and actually goes through dozens of homes on the LR, so this is not a one off for my particular property I am buying. It goes through the middle of the house I am buying, but it also travels though the gardens of others etc.
I am tempted to knock on the door of a prospective neighbour who has this ditch going through theirs and see what they say.
In any regard I’ll take advice from my solicitor about how quickly this is going to be resolved - at the moment it going to be 2.5 months for the application and claim to title.
Not many homes of this size and proportion pop up where I live - certainly not in the 18 months we were looking. I’m not in a chain, so I can wait. I can however imagine the chain would have collapsed at this point if one existed.
The ditch markings stretches a mile of so and actually goes through dozens of homes on the LR, so this is not a one off for my particular property I am buying. It goes through the middle of the house I am buying, but it also travels though the gardens of others etc.
I am tempted to knock on the door of a prospective neighbour who has this ditch going through theirs and see what they say.
In any regard I’ll take advice from my solicitor about how quickly this is going to be resolved - at the moment it going to be 2.5 months for the application and claim to title.
Not many homes of this size and proportion pop up where I live - certainly not in the 18 months we were looking. I’m not in a chain, so I can wait. I can however imagine the chain would have collapsed at this point if one existed.
Littlebasher said:
...except my solicitor discovered that part of 'my' property was unregistered after i completed on the purchase. It took 18 months to resolve.
How did that happen? In this situation I’ve been clearly shown the land registry boundaries, hence this was picked up. Edited by devnull on Thursday 1st November 08:42
Edited by devnull on Thursday 1st November 08:43
I had a situation like this when I was looking to buy
In the end I pulled out as it was all so vague with lots of "perhaps","maybe", and "in some circumstances" from the solicitor.
The sellers weren't happy but in my view they knew about it so should have sorted it out in the 10 years they'd lived there.
In the end I pulled out as it was all so vague with lots of "perhaps","maybe", and "in some circumstances" from the solicitor.
The sellers weren't happy but in my view they knew about it so should have sorted it out in the 10 years they'd lived there.
devnull said:
How did that happen? In this situation I’ve been clearly shown the land registry boundaries, hence this was picked up.
Not entirely sure why it was missed, but the result was that i didn't own the middle part of my property. Massive conveyancing balls up.Initially, the 'best' outcome was obtaining possessory title being that i could prove the house had been here since 1990. After 18 months of searches, all manner of legal stuff and surveys it was eventually sorted.
I have to say, the LR were very good in all this. But they don't just hand out possessory titles without a massive amount of due dilligence, even where you can prove a property has been sat on a piece of land for 20 odd years.
In the end, as no ownership of the land could be established it was deemed to be property of the crown. Her majesty (possibly not personally) decided that she really wasn't bothered about half a house and generously gave it me for free.
So the LR gave me full title, none of this possessory malarky. And i now have 3 separate deeds for my house.
Was causing me no end of worry at the time
devnull said:
The ditch was removed in the late 70s where land was converted from farmland and rev developed into housing that it is today. There are huge flood defences in place near by, and I’ve lived in this area for 10 years, so I am less worried about flooding. I’ve seen the reports from the searches.
The ditch markings stretches a mile of so and actually goes through dozens of homes on the LR, so this is not a one off for my particular property I am buying. It goes through the middle of the house I am buying, but it also travels though the gardens of others etc.
I am tempted to knock on the door of a prospective neighbour who has this ditch going through theirs and see what they say.
In any regard I’ll take advice from my solicitor about how quickly this is going to be resolved - at the moment it going to be 2.5 months for the application and claim to title.
Not many homes of this size and proportion pop up where I live - certainly not in the 18 months we were looking. I’m not in a chain, so I can wait. I can however imagine the chain would have collapsed at this point if one existed.
The fact that the unregistered land is a ditch adds complexity.The ditch markings stretches a mile of so and actually goes through dozens of homes on the LR, so this is not a one off for my particular property I am buying. It goes through the middle of the house I am buying, but it also travels though the gardens of others etc.
I am tempted to knock on the door of a prospective neighbour who has this ditch going through theirs and see what they say.
In any regard I’ll take advice from my solicitor about how quickly this is going to be resolved - at the moment it going to be 2.5 months for the application and claim to title.
Not many homes of this size and proportion pop up where I live - certainly not in the 18 months we were looking. I’m not in a chain, so I can wait. I can however imagine the chain would have collapsed at this point if one existed.
The question is, why is it unregistered?
It might simply be an issue with title plans not marrying up at field boundary’s, given that is where you would typically find a ditch. However, land drains can be a bit of an issue as third parties often have an interest in them. For example in some areas there are local drainage boards who can actually claim title over drainage ditches passing through farmland.
So there is a possibility that someone out there owns this ditch, other than the person trying to sell it to you. Speaking to neighbours is a good idea. It could also help to confirm that the ditch no longer functions anywhere along its length.
The other thing that strikes me is that the vendor is going straight for adverse possession. They will need to demonstrate that they have occupied the land, without the permission of the landowner for at least 12 years. If they are successful, that will allow them to register ownership in the form of possessory title. If you buy the house, the title will still be defective and you may struggle to mortgage or sell in future.
It will be a further 12 years before you can upgrade from possessory to full title.
The point is, this is not a ‘run of the mill’ house sale issue. The vendor cannot prove they own the land the house is built on. They need to sort that out before they are in a position to sell. Any offer you have made us not actionable, so technically your chain (of 2) has already collapsed.
Edited by Elysium on Friday 2nd November 14:52
Elysium said:
Lots of useful stuff
Thanks for your response (and to the others actually). So right now, I am not 100% if the land is unregistered or not. I will need to check with my solicitor next week.
My solicitor has initially been quite positive about all this - it was originally suspected that the developer of the land owned the strip and never updated the plans to reflect the changes. I can only presume that because the developer now does not exist and did not get absorbed into a larger developer (like persimmon) is why they are going down the adverse possession route.
I have seen on a larger LR plan now, that down the street two homes which the strip of land goes through have the land incorporated into their title, so I might go and ask them.
jonesey said:
If I were you, I’d buy a legal indemnity/title insurance policy and move on with my life. A few hundred quid should see you sleep sound in your new house.
He can't solve this by buying a title indemnity policy. At this point the vendor has no title to this land and he cannot prove it is his to sell. If it was a strip of garden, then you might be fine, but in this case, it runs right under the house. Assuming posessory title is obtained, the sale can proceed and any mortgage lender will insist on an indemnity policy to protect their interest.
The question then is - would 'bet your house' on the robustness of that title policy? In the OP's situation, the very worst case might be a need to demolish the extension. You would expect an indemnity to provide a degree of financial compensation if that happens, but you would still have a big problem to sort out, with potential unrecoverable costs.
The risk in this case is still unknown. Personally, I would want to look carefully at the statutory declaration the vendor will need to provide in order to get possessory title. I would be thinking carefully about who could possibly claim ownership over the next 12 years, what the chances are that I might need to sell during that period and if the situation might narrow my options for remortgaging.
I did exactly that when I bought a house with possessory title and one of the reasons I got comfortable with it was the considerable amount of time that had passed since it was first registered (about 10 years). My lender was happy with it, but my solicitor told me that was relatively unusual.
By the way, I did some digging this weekend. The strip of land in question is indeed registered, so I bought access to the title deeds from the LR.
The current proprietor of the land (since the early 80s) is the original developer of the homes. As far as I can tell, that developer is now defunct - I.e i cannot find any information on the companies house site. I cannot figure what has happened to them, I.e did they dissolve or get acquired.
I should also note that the current proprietor also only has possessory title of the land since the early 80s.
This house will be my future family home, so I intend live there for the next 20 odd years, all things going well. If I have to upgrade the title myself in the future then I will.
The current proprietor of the land (since the early 80s) is the original developer of the homes. As far as I can tell, that developer is now defunct - I.e i cannot find any information on the companies house site. I cannot figure what has happened to them, I.e did they dissolve or get acquired.
I should also note that the current proprietor also only has possessory title of the land since the early 80s.
This house will be my future family home, so I intend live there for the next 20 odd years, all things going well. If I have to upgrade the title myself in the future then I will.
Edited by devnull on Sunday 4th November 20:13
devnull said:
By the way, I did some digging this weekend. The strip of land in question is indeed registered, so I bought access to the title deeds from the LR.
The current proprietor of the land (since the early 80s) is the original developer of the homes. As far as I can tell, that developer is now defunct - I.e i cannot find any information on the companies house site. I cannot figure what has happened to them, I.e did they dissolve or get acquired.
I should also note that the current proprietor also only has possessory title of the land since the early 80s.
This house will be my future family home, so I intend live there for the next 20 odd years, all things going well. If I have to upgrade the title myself in the future then I will.
That makes sense. Potentially a mistake that was never remedied due to the disappearance of the original developer. The current proprietor of the land (since the early 80s) is the original developer of the homes. As far as I can tell, that developer is now defunct - I.e i cannot find any information on the companies house site. I cannot figure what has happened to them, I.e did they dissolve or get acquired.
I should also note that the current proprietor also only has possessory title of the land since the early 80s.
This house will be my future family home, so I intend live there for the next 20 odd years, all things going well. If I have to upgrade the title myself in the future then I will.
So this is a genuine adverse possession issue. The problem is that the vendor has built an extension on land that is owned by a third party. As a result, the house is effectively unsellable.
It’s a good sign that the title has been registered for many years. If there were owners other than the original developer, you would expect they would have come forward by now.
It would be interesting to find out if the neighbours went through adverse possession to acquire the strip where it runs through their land.
Apart from two homes at the end of the strip, no other homes have claimed their part of that land. Those two homes in question had incorporated the land prior to 1983 which is the date of the title plan from the LR.
My solicitor have confirmed that the proprietor of the posessory title is from a developer who no longer exists. The noticed served to the proprietor would be to the last known address. They have noted that there is an off chance that since the current owners have lived at the property in 1988 and have had the extension since 1991, and that the propritor may no longer exist, the LR might just award title absolute to the current owners so they may transfer to me, but i am not getting my hopes up.
Current owners are very blase about all this, I do not think they know their land boundaries properly, nor has their solicitor spelled the lack of sellability of their property out to them sufficiently.
My solicitor have confirmed that the proprietor of the posessory title is from a developer who no longer exists. The noticed served to the proprietor would be to the last known address. They have noted that there is an off chance that since the current owners have lived at the property in 1988 and have had the extension since 1991, and that the propritor may no longer exist, the LR might just award title absolute to the current owners so they may transfer to me, but i am not getting my hopes up.
Current owners are very blase about all this, I do not think they know their land boundaries properly, nor has their solicitor spelled the lack of sellability of their property out to them sufficiently.
Elysium said:
He can't solve this by buying a title indemnity policy. At this point the vendor has no title to this land and he cannot prove it is his to sell. If it was a strip of garden, then you might be fine, but in this case, it runs right under the house.
Assuming posessory title is obtained, the sale can proceed and any mortgage lender will insist on an indemnity policy to protect their interest.
The question then is - would 'bet your house' on the robustness of that title policy? In the OP's situation, the very worst case might be a need to demolish the extension. You would expect an indemnity to provide a degree of financial compensation if that happens, but you would still have a big problem to sort out, with potential unrecoverable costs.
The risk in this case is still unknown. Personally, I would want to look carefully at the statutory declaration the vendor will need to provide in order to get possessory title. I would be thinking carefully about who could possibly claim ownership over the next 12 years, what the chances are that I might need to sell during that period and if the situation might narrow my options for remortgaging.
I did exactly that when I bought a house with possessory title and one of the reasons I got comfortable with it was the considerable amount of time that had passed since it was first registered (about 10 years). My lender was happy with it, but my solicitor told me that was relatively unusual.
There are insurance solutions out there. Devnull, I tried to send you an email. Can you PM me and i'll forward details if interested. Assuming posessory title is obtained, the sale can proceed and any mortgage lender will insist on an indemnity policy to protect their interest.
The question then is - would 'bet your house' on the robustness of that title policy? In the OP's situation, the very worst case might be a need to demolish the extension. You would expect an indemnity to provide a degree of financial compensation if that happens, but you would still have a big problem to sort out, with potential unrecoverable costs.
The risk in this case is still unknown. Personally, I would want to look carefully at the statutory declaration the vendor will need to provide in order to get possessory title. I would be thinking carefully about who could possibly claim ownership over the next 12 years, what the chances are that I might need to sell during that period and if the situation might narrow my options for remortgaging.
I did exactly that when I bought a house with possessory title and one of the reasons I got comfortable with it was the considerable amount of time that had passed since it was first registered (about 10 years). My lender was happy with it, but my solicitor told me that was relatively unusual.
LJ
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