Are You Taking Stock?
Many owners of farming land have owned their land for many years, quite often due to being handed down through generations. As such, there is little reason for their deeds to be looked at. Often they enter into informal arrangements with third parties without involving a solicitor, which can also impact on any future sale of that land. So when the decision is made to sell issues can arise such as:
Where are your title deeds?
The first step in selling your land is to provide your deeds to your solicitor and if you can’t locate your deeds, then a lesser possessory title may be provided which could impact on the purchase price.
Your unregistered deeds may be held by a lender as security for a mortgage, unlike registered land title deeds which are not usually held by the lender as evidence of title but centrally held by the Land Registry. Loss of registered title deeds doesn’t cause an issue.
Are all agreements relating to the land reflected in your title deeds?
If you’ve agreed to give a right of way or easement for utilities through your land to a third party, has this been documented by way of a Deed of Grant or Easement? If not, issues can arise in terms of proving the basis of those rights i.e. the frequency, restrictions on use, maintenance obligations, etc. Unless the terms are clearly documented, you could have difficulty in satisfying a purchaser’s concerns about this agreement, for example ‘can they terminate the agreement if they don’t wish to be bound by it?’ You could also incur legal costs in challenging a third party who is abusing the extent of those rights.
While all is not lost if you’ve genuinely lost your title deeds, it does cause potential issues as you’re required to provide sufficient evidence to the Land Registry in support of your ownership of the land. This can be quite difficult as recently the Land Registry will only grant a possessory title as opposed to absolute title, irrespective of the quality of evidence being produced to them. As such, a purchaser’s solicitor will insist that you pay the cost of possessory title indemnity insurance to cover a purchaser against losses from a future challenge to their title to the land. In addition, the purchaser’s lender may have specific requirements before funding purchase of possessory title.
To get possessory title, you will have legal costs for preparing a statutory declaration in evidence of your ownership and an application to the Land Registry (together with registration fee) for registration of that land. If your land is registered at the Land Registry prior to loss of deeds, official copies of your title are held centrally by the Land Registry which avoids the need for the declaration as it proves title.
Unregistered title is not in itself defective title, but it does:
- Leave you open to potential claims of adverse possession of your land; and
- Allows confusion as to the extent of ownership of the land often due to poor-quality old title plans.
Registration allows the Land Registry to notify you of any application or claim affecting your land and you’re advised to have your solicitor make a voluntary application to the Land Registry to register your title to avoid these unnecessary issues.
Get in touch – Joy Hancock has considerable experience in the property sector and specialises in land and property matters and asset management.