In this blog I will explain what is possessory title and how it effects the sale of your property and the value.

So what is possessory title well that’s the legal term given to a property or land that doesn’t have full title absolute (the gold standard title which basically means there is absolute proof of ownership therefore no chance of anyone disputing your right to sell or occupy the property)  .

Possessory title then is when you don’t have absolute proof of ownership and there is a chance of someone disputing your right to own/occupy or sell the property or land. You can be granted possessory title form any reasons and it happens much more than you may think , here at Jeffries Property Buyers we deal with this on a regular basis in fact we’ve helped 2 sellers with possessory title this last month already.

Examples of why this happens might include:-

·      Lost deeds (old paper deeds lodged with a solicitor or bank and subsequently lost).

·      Land that’s been used for years and now forms part of the property boundary but never actually purchased (adverse possession)

·      Property that’s been passed on through the generations and there are no deeds or proof of original conveyancing.

I’d say the most common reason I see for this is adverse possession which is where an owner has simply over the years used a piece of land for so long it now forms part of their property. In order for this to be legal they have to have:-

·      Exclusively occupied the property or land for at least 12 years (10 if unregistered)

·      Made zero payments and had no permissions to occupy.

·      Not received any objections to them occupying during the 12 years

·      Demonstrated intent / tended to the land for the 12 years (fencing the land would demonstrate intent)

So if the above criteria is met you can apply to the land registry for possessory title it’s important to instruct a good solicitor to do this for you in my opinion as a mistake at this stage can cause delays or worse.  Once you’ve submitted your forms and any evidence you may have the land registry will in my experience write to the most likely interested parties that may well be the owners of any neighbouring property asking if they agree or if they consider themselves to have any claim on the property. If they respond and challenge the possessory title or anyone else comes forward with evidence of ownership such as:-

·      Old deeds or epitome of title

·      Proof of fraud or incorrect processing in your application

Forgotten covenants or third party rights which would have been in the original lost deeds ( your neighbour’s property may have been built at the same time by the same builder their deeds could show these covenants which would also have applied to your property).

Should this happen and your right to the property is challenged you would lose the possessory title and indeed have no right to claim for any loses , for example if you’ve built on the land you have lost that property and the value/cost of doing so.

Upgrading from possessory title.

After a period of 12 years from being granted you can apply for full title (providing no challenges have been made or if you come across any new evidence such as finding the original deeds)

And that’s the best route to getting full title which should allow you to get the full market value for the property, but we appreciate not everyone has the luxury of holding onto their property for the 12 years required if they are successful with the possessory title application so what options do you have .

There is insurance available from specialised brokers (please ask your solicitor to recommend a broker) this indemnity insurance would be taken out at exchange in the buyers name but usually at the sellers expense, the underwriters will look at each case asses the risk and quote or decline to cover accordingly. It’s worth noting that if you have this type of insurance and you approach anyone that may have a claim the insurance is void but it will cover you if a claim is made against your title and that claim causes a drop in the value of your property but it will not cover you if you make an application to the land registry for possessory title and that application is rejected.

With insurance the buyer may be willing to take the risk however they will certainly want the price to reflect the risk they are taking and if they require a mortgage my experience is there are very few lenders that will take on these properties and those that do, as they are offering a niche product and competition is low can charge a higher fee or interest rate and ask for a larger deposit in order to lower the loan to value and therefore their risk.

The other option is to sell to a professional cash buyer like us at Jeffries Property Buyers , as we don’t require a mortgage to buy we can assess the risk on each possessory title property individually, we can take the time to go through the options and any evidence you may have perhaps you have old photos of your family on the property etc it all helps us assess the potential risk and get you a fair cash offer which we can complete on in a timescale to suit you, leaving us to worry about the legal and land registry applications in the mean time we often refurbish and let out the property’s kept in use whilst we wait to be able to upgrade the title.

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