What Are Title Deeds? Selling A House With Title Problems

Looking at the different types of title deed problems, what this will mean for you as the owner and how to sell a house with title problems...

Selling your house is a stressful enough experience without realising you have a title problem with your property. The majority of properties are registered at HM Land Registry with a unique title number, register, and title plan. If a problem occurs with the title deeds of the property, it can spell problems further down the selling process.

In this article, we will be looking at the different types of title deed problems, what this will mean for you as the owner and how to sell a house with title problems.

What Is A Property Title?

A “title” is the legal right to use and modify a property as you decide to, or to share in the property to others via a “title deed” or even to transfer interest. A property title can be owned by just one person or it can be owned by multiple people. An example of this may be a husband and wife sharing the title.

The “title deed” on the other hand is a legal document that transfers ownership from one person to another. Whilst the title is concerned with a person’s right to the property, the title deeds are the physical documents concerning this.

When selling a house with title problems, you will hear other terms thrown around, such as “title number”,” title plan” and” title register”. A title number is a number that is unique to the property that is assigned by the Land registry when it is registered. This allows the property to be distinguished from others. This title number can then be used to obtain copies of the title register and other relevant registered documents.

The title register is another term for the title deeds and the title plan is a map that is produced by the HM Land Registry. This map illustrates the property boundaries.

What Are The Most Common Title Problems?

Whilst title problems come in all shapes and sizes, these are the most common ones that homeowners come across:

• Title deeds have been destroyed or lost

• The class of title needs to be updated

• Restrictions, notices, or charges secured against the property

• The owner of the deeds has died

• Restrictive Covenants

• Unregistered Land

• An error or defect is present on the legal title or boundary plan

What is the property chain?

Now that we have looked at the most common types of title problems that can come with properties, we can now look at what these issues actually mean.

Title deeds have been destroyed or lost

Before you can even begin the legal process of selling your home, you need to be able to prove that you are the legal owner of the property and that you have the right to sell it. If the title deeds for your registered property have been destroyed or lost, you will first need to carry out a search at the Land Registry to locate your property and the title number.

Through the Land Registry search, you will be able to obtain the title register and any other documents related to the deed, but you will need to pay a fee before you can access this information. This will usually apply to both freehold and leasehold properties.

It is worth keeping in mind that the deeds aren’t necessary to prove ownership of the property as the Land Registry keeps the definitive record of ownership of land and property in England and Wales.

Missing title deeds become more of a problem when your property is unregistered as the Land Registry will have no records to prove ownership. Without your deeds acting as proof of ownership, you cannot prove that you have the right to sell your home.

Around 14% of all freehold properties in England are unregistered. If you cannot find the deeds, you will need to find them as soon as possible so that you may start your selling process. You can ask the solicitor or conveyancer that you used to see if they have any spare copies. You could also ask your mortgage lender to see if they have a spare version.

If you cannot find the original deeds, your solicitor or conveyancer can apply to the Land Registry for first registration of the property. However, if you are going to do this you need to be aware that applying for first registry is a lengthy and very expensive process and it requires a legal professional who has an understanding of the law in this area.

The class of title needs to be updated

Titles come with several possible different types of classifications when they are registered with HM Land Registry. Freeholds and Leaseholds can be granted an absolute title, a possessory title, or a qualified title. The best class of title to get is an absolute title and is awarded in the majority of cases.

If there is a defect in the deeds, however, a possessory title will be granted. A possessory title is rare and is only awarded when the owner claims to have acquired the land through adverse possession or if they cannot produce documentary evidence of the title. The rarest kind of title that is awarded is the qualified title, and this is only awarded if a specific date has been stated in the register.

Through the Land Registry Act 2002, certain people are permitted to upgrade from an inferior class of title to a better one. You can find who can qualify on the Government guidelines list. The easiest route to finding out if you qualify is to consult with your solicitor or conveyancer and explore the legal options together.

Restrictions, notices, or charges secured against the property

Through the Land Registry Act 2002, two types of protection of third-party interests affecting registered estates and charges – notices and restrictions – are permitted. These matters are typically complex and are best dealt with by a solicitor or a conveyancer, as the government guidelines are full of legal jargon that can be difficult to navigate.

A notice is, in short, “an entry made in the register in respect of the burden of an interest affecting a registered estate or charge.” This means that if more than one party has an interest in the same property, a new disposition will not affect someone with an existing interest. This means that a new interest will not outrank the interest that came before it.

There is, however, one exception to this rule. If someone is in need of a “registrable disposition for value” and a notice entered in the register of a third-party interest will protect its priority if this were to happen. If any third-party interest that has not been protected by being noted on the register is lost when the property is sold, buyers can expect to purchase a property that is free of other interests.

However, it is worth noting that the effect that the notice has is limited. Having a notice does not secure the validity or the protection of an interest, it simply just ‘notes’ that a claim has been made on the property.

A restriction is used to prevent the registration of a subsequent registrable disposition for value and in turn, prevents the postponement of a third-party interest.

In the case that a homeowner is taken to court for a debt, then the creditor can apply for a “charging order”. This will secure the debt against their property and should it not be repaid within the agreed time frame; the homeowner runs the risk of losing their home.

The owner of the deeds has died

In the unfortunate circumstance that a homeowner has died,anyone who wants to sell the property will have to prove that they are entitled to do so. Probate occurs when the deceased leaves a will stating who they wish to leave the property to. Probate then allows the named person to transfer or to sell the property.

When a homeowner dies without leaving a will, then they have died “intestate” and the beneficiary of the property can only be established through the rules of intestacy. This means that rather than a named person obtaining probate, the next of kin will receive ‘letters of administration’. The process of establishing a new owner can take months.

What is an example of a restrictive covenant?

A restrictive covenant is a type of restriction which could affect your land for the benefit of neighbouring land. An example of this would be a restrictive covenant that could stop you from building on your land unless you have already gotten permission from the neighbouring property owners.

If you are found to be in breach of this restriction, then you or the following owner could face legal action. The neighbouring property owner could seek some form of compensation or the removal of the extension. This sort of risk could worry any potential buyers.

If any restrictive covenants affect your property, they should be outlined in the deeds. If there has been a technical breach and your property has been affected, there will be different options based on the circumstances.

For example, you might be able to apply for retrospective consent or prove that the restriction is no longer able to be enforced. However, this only happens in a few cases and it will be worth consulting your solicitor or conveyancer before you proceed.

Unregistered Land

More than 85% of the land in England and Wales is registered, meaning more likely than not, your title is registered. However, if it is not then the process of selling your home will only get more complicated.

It may have been a case that the title may not have been registered because of an earlier failure to apply for registration. If this is the case then you will need your solicitor to decide on the best course of action, whether that is to allow late registration or to seek a retransfer. However, until this all goes through, you will not have a legal title and you will not be able to complete your sale on the open market.

The most common cause of property being unregistered is because it has been under the same ownership for many years. Instead of using the Land’s Registry’s register, the buyer’s solicitor will need to examine the title deeds. This is an incredibly difficult process, and conveyancing may take quite some time.

An error or defect is present on the legal title or boundary plan

As a rule of thumb, the register is conclusive about ownership rights, but it can be amended or rectified if a property owner meets the strict criteria. Alterations can be made in the following circumstances:

• Correct A Mistake

• Bring The Register Up To Date

• Remove A Superfluous Entry

• Give Effect To An Estate, Interest, Or Legal Right That Is Not Affected By Registration

The registrar or the court can order an alteration. In order to be classed as a “rectification”, an alteration needs to correct a mistake that “prejudicially affects the title of a registered proprietor”. If a legal title is found to be missing information or if there is an error included in the title, then it will be classed as “defective”.

An example of this would be if a right of way across the land is missing, or if a piece of land that does not makeup part of the property is included in the title.

Properties in England and Wales that are registered with the Land Registry will have legal title and attached plan. This is called a “filed plan”, which is a map that gives the owner an outline of the property’s boundaries.

When a property is first registered, a file plan is drawn up based on a plan taken from the title deed. Once it has been drawn up, a plan is only updated when a boundary is repositioned or the size of the property changes significantly, like if a piece of land is sold.

The ‘general boundaries rule’ applies under the Land Registration Act 2002, meaning that the filed plan gives a ‘general boundary’ for the purposes of the register. It does not provide an exact line of the boundary.

When wishing to establish an exact boundary, the property owner can apply to the Land Registry to determine the exact boundary, but this does not occur often.

How To Sell A House With Title Problems?

Thankfully, whilst selling a house with title problems or without title deedscan be a difficult task, there are options for you. The two main routes that sellers use are to correct the deed issues or to sell to a genuine cash buyer.

Solicitors

If you decide that you want to go ahead with selling your house on the open market, then you will need to correct the title problems that you have. This is usually an expensive and lengthy process that can slow down your house selling process.

If you do decide to go down this route, you need to be aware that you will need the help of solicitors and the Land Registry in order to replace or correct any issues you may have. This is not cheap and does not factor in any additional costs of paying for new title deeds.

Cash Buyers

If you don’t want to deal with the hassle of dealing with lawyers and conveyancers, there is another option for selling a property with title problems or missing title deeds. Selling to a genuine cash buyer is a way to sell your property without having to go through the hassle of filling out forms and forking out on legal fees to correct the title deeds.

As a genuine cash buyer has the funds available to buy your property, they will purchase your home hassle-free, in a time frame that suits you.

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