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Ask Buachaill Your Own Question
Buachaill, Barrister
Category: Property Law
Satisfied Customers: 10944
Experience:  Barrister 17 years experience
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Having started proceedings to purchase a house, I

Customer Question

Having started proceedings to purchase a house, I now discover from the selling solicitor that the house is being sold with only a Possessory title, as the deeds and documents of the freehold title were apparently lost some time ago (this was not known at the time of my offer) and not registered with Land Registry. This is a probate property and the daughters are dealing with the estate.
The land was originally purchased in 1961 and the owners built there home on the plot, the land has never been registered.
The seller's solicitor is providing an Indemnity Policy; however, if another person, at any time in the next 12 years, is able to prove true ownership of the property, I will be evicted by the "true owner" and the policy will only compensate for the amount I have paid for the house.
The Possessory title was registered only one month ago, so therefore the title to the property cannot be upgraded to Title Absolute for another 12 years.
My questions are:
1) If I am to proceed with the purchase, should I renegotiate the purchase price, if so, by how much? How much does a Possessory title affect the market price of the property? I have been told that the house is only worth 60% of the market value? The purchase price before knowing about the title, is £1,000,000. This was offered and accepted by the vendor 3 months ago.
2)My plan is to knock down the current property and rebuild a new one. Are there any restrictions under the indemnity insurance? By rebuilding the price of the property will be worth £1.8-£2m, what happens to the indemnity insurance? will the insurance need to be increased?
There maybe other questions you maybe able to think of, but I think these are the most important ones.
Submitted: 2 years ago.
Category: Property Law
Expert:  Buachaill replied 2 years ago.
1. Dear Prince, you need to realise that you need an inherent gambler's instinct to take the risk in this instance. You are only buying a site. But the site is a pig in the poke, because ownership cannot be proved. There is clearly something really wrong here, because the land Registry would grant an absolute title after forty years possession if the owners could show forty years possession. If you are to be believed, they have lived there since 1960 - over 55 years. Accordingly, they could prove title by long possession. So there is something someone is not being very honest about.
Expert:  Buachaill replied 2 years ago.
2. The second thing is that a site without title is not worth much. Maybe £200,000 as opposed to a million. the fact it hasn't title means it is not worth much. Whoever told you 60% is being very generous. They are not being very honest about the real value of a plot without title. The fact that you immediately intend to invest more money on the site makes me wonder is it really suitable for you. This is a site you need to sit on and not attract attention so no one comes out of the woodwork. Build a big house and you are encouraging someone to come out of the woodwork and query your title. I would be thinking in terms of sitting on the plot for the 12 years and investing nothing. Not rolling the dice - loaded - like a gambler who believe that luck is with him and not the house!