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Are you at risk if your property is unregistered?
There are two ways in which legal ownership of a property can be proved. Registered Property and Unregistered Property. Lucy McCallum, Board Director and Head of Residential Property Team talks through the benefits and risks of both.
What is the difference between registered and unregistered Property?
The Land Registry keeps a record of all registered property in England and Wales. The register includes all rights benefiting a property, who the legal owners are, rights over the property, covenants and any charges or restrictions.
Compulsory registration of properties came into effect in England and Wales in the 1990s. This requires all sales or other transfers of ownership (including assents, gifts and transfers of equity) to be registered with the Land Registry, within two months of completion of a transaction.
Currently, around 85% of properties in England and Wales are now registered.
If a property is unregistered it can be hard to find the legal owners as there is no central record of ownership to search.
In order to prove ownership of an unregistered property, you must show an unbroken chain of ownership for at least the past 15 years, evidenced through the production of the original title deeds and documents, which proves that the legal owner has good title.
If a property is not registered at the Land Registry when a sale is completed, the law requires that it must be registered on completion of the sale of the property by the purchaser. This will be done by the purchaser’s solicitors as part of the conveyancing process.
What are the issues with unregistered properties?
There are a number issues that can slow down the sale process if your property is unregistered. There are also risks associated with owning unregistered property even if you are not intending to sell it.
Uncertainty of boundaries
Quite often the plans attached to old title deeds are unclear or do not contain the details you would see on a registered Title Plan, such as a scale, a North point and the boundaries of the adjoining properties.
It is therefore essential to ensure that the boundaries shown on any plans you hold are clear enough to establish the correct boundaries as they are on the ground. Costly problems can arise if any plans you hold are later found to be incorrect during the process of registration.
If you are selling your property and the plans are particularly unclear, the purchaser may require you to register the property before proceeding to exchange of contract. This may delay the sale, whilst the Land Registry deal with the application for first registration.
Adverse Possession (or Squatter’s Rights)
If a person has used unregistered property exclusively for an uninterrupted period of 12 years or more:
- Without objection
- Without permission
- Without payment to the true legal owner
Then they can claim Adverse Possession of the whole of the property or part of it.
This quite often happens with parts of gardens that can be fenced off and used as part of the garden of a neighbouring property.
When the Land Registry receives an application for Adverse Possession, they are required to notify the legal owner, who may not have an automatic right to object to the application.
The legal owners will be unknown to the Land Registry, who will likely not know who to serve the notice on. This opens up the possibility of fraudulent claims being made on unregistered land.
Properties Passing of the Crown
Property can pass to the Crown if legal ownership cannot be established following the death of the legal owner. If a property is registered, this would be avoided.
Lost Title Deeds
If the title deeds and documents go missing or are destroyed, you will likely find it difficult to prove you legally own your property.
In order to register a property without title deeds, a conveyancer would need to reconstitute the deeds. This involves putting together sufficient evidence to allow the Land Registry to determine if registration is possible. Each application will be determined on its individual facts.
Should I register my property?
If your property remains unregistered, and you are concerned about the risks above, you can apply to the Land Registry voluntarily to register it. The Land Registry offer a discounted fee for this service.
Registering your property now could save you time and expense in the future.
If you are planning on selling the property, it can make the process easier and quicker if you apply to register your property before putting it on the market.
Land Registry Property Alerts
The Land Registry offers a free ‘Property Alert Service’ for properties registered in England and Wales. It should be considered by anyone wishing to take steps to protect a registered property from a risk of fraud.
This might be of particular importance where the owners do not reside at the property, however, owner-occupiers would equally benefit from this service. Once signed up, you will receive email alerts from the Land Registry when certain activity occurs on your monitored properties, for example, when official searches and applications are made.
If these activities are unexpected or concerning, the alert will allow and prompt you to take immediate action, as necessary.
You can visit our Residential Property pages for more information around anything property related.
For all your legal needs around your residential property please contact Associate Solicitor Lucy McCallum here or use the form in the sidebar of this page. Alternatively you can call us on 01453 847200