Common questions on unregistered land property transactions
Although the Land Registry is committed to having all land registered in the UK by 2030 14% of the freehold land in the UK remains unregistered. What does this mean for sellers and buyers when they come across unregistered land? This article aims to answer a few common questions that arise.
Where are the deeds?
Where a property is unregistered, there will normally be a pack of old documents called the “deeds” showing the history of the ownership of the property and who it was last transferred to i.e. the current owner. As these are the only proof of ownership for unregistered land they tended to be kept in secure and safe places. So, particularly for those who may inherit a property and may not have knowledge of where the deeds are, good places to look are:
Safe – Fireproof and secure, owners who have possession of their deeds tend to have invested in a safe to keep the deeds protected.
Bank/Lender – If the property was purchased with a mortgage, the bank usually held the deeds. Then, when the mortgage was paid off, they would return these to the owner. However, some banks and building societies would offer to hold the deeds even once the mortgage had been paid so they may still be with the lender in their deeds store.
Solicitor – Sometimes the solicitor may hold the deeds after the property is purchased in their deeds store or strong room. If not, they should have a good idea of where the deeds may be or where to look.
If the above three options yield no fruit then there is an option to register property without the deeds. The Land Registry will want a statement from the person who lost or is looking for the deeds to say what steps they have taken to find them. The Land Registry will then register the title of the property but the title will contain a protective entry in the Charges Register stating that the deeds were lost and any subsequent purchaser is likely to require an indemnity insurance policy to cover this.
Who should register the property?
If the location of the deeds is known the next question is who should register the property and, closely associated with this, when should the application for registration be sent to the land registry. If the question of registration has arisen in connection with a house sale it is typical for the incoming purchaser to register the property. As the sale of a property is a trigger for first registration it will have to be registered at the point of sale and with the buyer being transferred the ownership on sale, it often makes sense to register the ownership of the new owner and first registration at the same time. Buyers should be aware that the registration fees at land registry are double what they normally are for unregistered properties. Solicitors tend to also charge an additional fee for dealing with unregistered land as it is more complex and takes more time to go through the deeds. If the question of registration has arisen for another reason (solar panel lease for example) or the buyer, in the case of a house sale, will not proceed until the property is registered, then voluntary registration is an option for which there is a reduced fee. It should be noted in both cases however that the land registry is currently taking a long time to register unregistered properties (at times up to 3 months or longer) so this should be borne in mind if parties are considering having the property registered before a sale completes and how this fits in with parties’ timescales on wanting to get the deal done.