Although it can seem like a, ‘hit the panic button’ type of situation, selling a freehold with an unregistered title can still go ahead in most instances. It’s likely that the selling process will take a little longer and there may be some obstacles in the way, but it certainly doesn’t always mean that you won’t be able to sell your freehold. This is of course, so long as the appropriate actions are taken to rectify the situation. Fortunately, most of this work will be carried out by a qualified conveyancing solicitor, acting on your behalf when selling your freehold.
To help you with this process, we’re going to run through the steps that you should take if you’re considering selling a freehold with an unregistered title. We’ll also outline the typical actions that your solicitor will undertake during the freehold selling procedure. But first, let’s establish what a registered property actually is and find out why your freehold has not been registered.
What is a registered property?
In simple terms, a registered property is a property that has been registered with Land Registry. This means that the property’s ownership information together with various other details from the deeds have been extracted and added to the Land Registry’s electronic register in order to create a registered title.
Why do you need a registered title?
A registered title is incredibly important for the following reasons:
- It proves absolute ownership of the property
- It safeguards you against losing the original deeds to the property
- It makes selling and buying the property a lot easier
- It can help to protect you against identity fraud
- It provides clear details on all matters affecting the property
- If you lose the freehold title you can request a new copy for just £3
Why doesn’t your freehold have a registered title?
Around 13% of property in the UK is not registered[1], so you’re definitely not alone on this one.
Before 1925, proving property ownership was reliant upon having possession of the paper deeds to the property. Now, we all know how easy it is to lose documents, even important ones like these. Even more so where long periods of time have passed and where the property has been transferred between family members. Unfortunately, these crucial pieces of paper could easily get lost, buried in loft spaces, or tossed out accidentally, leaving the landowner with no way of proving their legal right to the property. So, if your property was built or transferred to a new owner before this act came into force, it’s a strong possibility that it’s the reason why you have an unregistered title.
The deeds-based system clearly had major faults and so in 1925, the Land Registration Act was introduced to make registration of new property and property transactions compulsory. The new system also removed the requirement to produce physical title deeds on paper in order to prove property ownership.
While this was a gigantic step in the right direction, some properties still fell through the net, as different areas of the country became compulsory at different times. Furthermore, certain types of transactions such as transfers to beneficiaries under a will (otherwise known as assents) and mortgages were not discovered, for one reason or another.
Unfortunately, this remained the case until the 1990s, where compulsory registration was finally enforced in all property transactions. Consequently, a lot of property went unregistered during this long period of time. The 1925 Act was rescinded by the Land Registration Act 2002, which made it compulsory for all land/property in England and Wales to be registered with Land Registry.
In order to maximise the number of property registrations, certain ‘trigger events’ in property transactions now demand a first registration application be made to Land Registry within two months of the event taking place.
Trigger events include:
- A conveyance on sale of freehold land
- A grant of a new lease for a term of more than 7 years
- The assignment on sale of a lease having an unexpired term exceeding 7 years
So, if your property has not been subject to any of these trigger events, it constitutes another possible reason why your freehold hasn’t got a registered title. The fact is that
it could be any one of the possibilities discussed above but essentially what we need to do is rectify the issue as quickly as possible.
What should you do if your property is not registered?
Ultimately, if your freehold doesn’t have a registered title, you need to register it with Land Registry. In fact, even if you’re not selling your property it is prudent to take steps to register your freehold voluntarily. Not only will this save you time were you ever to sell your freehold, but it will provide you with a great deal of security and peace of mind. In order to register your freehold with some ease, you will need the deeds to the property and will be required to pay the applicable fees.
If you can’t find the deeds and you have a mortgaged property, the deeds may be in the possession of your lender. To obtain them, you will need to submit a request in writing, however, it is unlikely that they will release the deeds for an unregistered property to anyone other than a solicitor.
Although it is possible to create a registered title without the deeds, this can be very difficult and expensive to achieve, moreover, it is not guaranteed. If you have lost the deeds, evidence will need to be provided to Land Registry that proves you are the legal owner of the property and explains why the deeds cannot be produced. Of course, if you’re selling your freehold, your solicitor will take care of this on your behalf.
Depending on the strength of the evidence of ownership, Land Registry may grant a title for the freehold. However, there are four different types of title, each providing the holder with varying rights to property ownership and thus affecting the saleability of the property.
Title Absolute
A Title Absolute is the best title that you can hold, as ownership of your freehold cannot be disputed and therefore it can be sold with ease. Land Registry will grant a Title Absolute on the presentation of the deeds to the property, which show an unbroken chain of ownership for a minimum of the last 15 years.
Qualified Title
A Qualified Title will be granted when an unbroken chain of ownership cannot be shown for a minimum of 15 years or where parts of the chain are missing. As such, a person with a better claim to the land could challenge ownership and ultimately win the legal rights to the property. Therefore, the property may decrease in value, and mortgage lenders may be unwilling to lend on the property, making it a lot harder to sell.
Possessory Title
A possessory title is likely to be granted when deeds to the property are lost or not in possession, but the applicant has physical occupation of the land. This occupation of the land must be unbroken for at least ten years in the case of registered land or 12 years for unregistered land.
A Possessory Title leaves the property at risk of possessory action where a person with the legal right to the property can gain possession. Similarly to above, the property may decrease in value, and mortgage lenders may be unwilling to lend on the property, making it harder to sell.
Good Leasehold
A Good Leasehold title is only applicable for leasehold properties for which an unbroken chain of ownership can be proved for the last 15 years but ownership of the freehold cannot be proven. As a result, it would be possible for a person with a claim to the freehold title to come forward and challenge the legality of the lease. This can make it difficult to sell the property as it may be hard for buyers to obtain a mortgage. However, an indemnity policy can be purchased which may satisfy lenders and buyer’s concerns in these matters.
How to sell an unregistered freehold
As highlighted above, it’s a lot easier to sell an unregistered freehold if you possess the physical title deeds. Your solicitor can then provide these to the buyer’s solicitor following the sale, who will then submit an application for registration. Subsequently, Land Registry will ensure that the correct documentation and evidence have been provided before updating their records to indicate a change of ownership.
If the deeds are unavailable when you come to sell the freehold, your solicitor will need to take steps to prove your unbroken ownership for at least the past 15 years. This is what’s known as establishing a Root of Title.
What is a Root of Title?
A Root of Title is essentially the specific items of information that prove property ownership. In order to establish a ‘good’ Root of Title, the Law of Property Act 1925 requires the provision of evidence that proves an unbroken chain of ownership for at least the past 15 years and ending with the current owner. Importantly, a good root of title must not contain anything that casts any doubt in the title.
Such evidence can include the following:
- Mortgage, transfer, or conveyance documents
- Assignments and assents
- Probates and powers of attorney
- Official bankruptcy searches (to prove the owners appearing in the chain of ownership were not bankrupted during their respective periods of ownership)
If the freehold is to be registered at Land Registry with a Title Absolute, a ‘good’ Root of Title and an unbroken chain of ownership is required.
Existing mortgages
You may be shocked to learn that any outstanding debt from unpaid mortgages will need to be repaid from the sale proceeds on completion of the sale of your freehold. This is the case regardless of whether or not it is a mortgage taken out in your name. If your solicitor’s searches discover mortgages taken out by you or the former owners, enquiries will be made to establish whether the debt is outstanding. If it is, a redemption statement will be requested from the lender, which shows the sum that must be paid.
Once a Root of Title has been established, your solicitor will assemble all of the evidence into a bundle of documents known as an Epitome of Title. This will be required by the buyer’s solicitors to prove that you have the right to sell your freehold. The Epitome of Title will also provide essential information relating to the property such as the identity of the freehold owner(s), boundary details, rights of way, restrictive and positive covenants, and easements.
Selling a freehold with an unregistered title to Freehold Sale
We’ve successfully helped numerous freeholders to sell freeholds with unregistered freehold titles. Although many freehold investors may be inclined to refuse the purchase, it doesn’t faze us here, at Freehold Sale. We’ll assist you with the entire process to help put your mind at ease and endeavour to get the sale of your freehold completed as soon as possible.
Furthermore, in some cases, we may even be able to accept the Epitome of Title showing a good Root of Title to proceed with the sale of your freehold. The freehold will then be registered to us on completion of the sale. This can significantly speed up the sale process, as you won’t have to wait for Land Registry to grant the registered freehold title.
To learn more, get in touch with our team.
[1] 365 Property Buyer (undated) https://365propertybuyer.co.uk/unregistered-property-everything-you-need-to-know/
