Investigating a property’s title is vital for any land buyer. Areas of land forming part of a proposed development may be subject to a number of third party rights, covenants, restrictions on use or a part may have already entered into a contract to buy it. These could prevent you purchasing a site or there might be items which you would need to take into account in planning your development.
When a property is registered at the Land Registry, the majority of these interests are recorded within the title documents. When checking the property ownership, the following are the most important things to check on the title to ensure you are purchasing what you think you are.
Whilst the contract may make it seem obvious who the seller is, the property may be held by multiple proprietors in different ways. For example, if the property is held by joint tenants, you will need the consent of each proprietor to proceed with the sale. You should always ensure that the registered proprietor’s name matches the name in the contract and where applicable, the company numbers are the same.
This identifies the level of title held by the landowner. Absolute title is the best class of title available and this is what you would be looking for when purchasing. If it is registered with qualified or possessory title then this means another person may be able to challenge the landowners ownership to it. These should therefore be treated with caution.
It is vital to check the extent of the land owned by the landowner. Special attention needs to be given to any land that is unregistered or registered under a different title number between your site and an adopted highway or forming part of land you need to put services through. Such land could be a ransom strip which means a third party could seek a substantial payment to grant you rights to construct an access or services through this land.
Before a potential ransom strip owner is approached please speak to your legal adviser: once you have spoken to the person who owns the ransom strip you will be unlikely to obtain defective title indemnity insurance.
The property may also be subject to financial charges. Again you would want these removed on completion of your purchase to ensure you do not take on any financial liability under them and are also able to sell your property.
There may be Option or Promotion Agreements noted against the title. Ordinarily these would be protected by a unilateral notice or restriction on title. This gives you an indication that another party may have the ability to buy the land or control the sale of it. It is best to find this out early on before too much money has been spent on looking at a site.
For more information on the article above please contact Hannah McGown.
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