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Land registration

Land registration

How establishing legal title secures your property

14/03/2017

Legal title guarantees a buyer that a property belongs to him and no one else. There is nothing as important having a property in your own name. The UK property market has experienced a lot of feuds that arise from unclear ownership rights. A buyer will never know when his chosen property will be subjected to ownership disputes until after he pays for the property. The very first duty of a buyer during conveyance is establishing legal title of a property beyond any reasonable doubt. The buyer can then rest assured that the property he is buying is owned by the seller and has rights to sell it. After the conveyancing completes, he can rest assured the property will be under his control.

Solicitors are responsible for conducting ownership research. However, there are cryptic home ownership details that even solicitors find difficult to uncover. Most of these pieces of information cannot even be found in Land Registry records where solicitors do most of their property ownership research. These pieces of information could be private agreements that a previous owner of the property had with a neighbour or a relative and are now affecting new owners.

Importance of establishing legal title ownership

The importance can not be stressed enough during a property transaction. The rights of the property reside with the owner of the property. He has to prove the legal title deed is in their name. To sell it without disputes he must show the verification documents. This will ensure smooth conveyancing for both buyer and the seller. Solicitors will be able to verify legal ownership and root out fake or misleading documents for establishing legal title.

Disputes eliminated by establishing legal title

One type of properties whose ownership rights may lead to conflicts are those properties that have been owned by a single family for many generations. Land Registry records only contain details of properties that have been sold or those whose owners have come forth to register their ownerships. Properties that have been owned by a lineage for a long time and have not been registered can be a problem to identify their ownerships. Anyone in the family can take and develop the property when other family members are not within reach. A rightful owner may then show up and cause many ownership disputes. Properties that are taken over by adverse ownerships face similar problems.

The other difficulty that presents itself during ownership research is liens. Liens are forms of security against properties that are granted by property holders in case of debt or other obligation. Liens are similar to mortgages. A property holder may use his home to get a debt from his neighbour. This makes the neighbour have the right to own a property if the borrower fails to pay his debt. Buying a property that is in lien may cause ownership disputes between a buyer and the lender.

Similar to liens are covenants of record. Covenants of record are agreements signed between a property holder and another party to give the other party a right to use the property in question in a given way. The agreement may permit the other party to use the land for grazing his cattle, or for the construction of a borehole. The individual with the right to use the property does not become an owner of that property. He may sue a new owner of the property if ownership he fails to adhere to the pre-signed agreement.

Verification of legal title deeds

There are many ways that a buyer could get verify legal property ownership. The very first one is conveyance research at the Land Registry. Solicitors have the responsibility of going through any available records when doing property research. Their research should leave ownership rights unquestionable. Most ownership titles can be verified by property analysis alone.

There are other ways that a buyer can protect himself from ownership disputes if conveyance research fails. A buyer can write a contingency to force the seller to prove that he indeed owns the property. The buyer can then opt out of the conveyance if the owner fails to prove his ownership. A buyer may also insure a property against ownership disputes. Insurance firms have policies that protect new buyers from disputes of ownership.

Importance of having unregistered land recorded in the Land Registry

13/01/2017

Registration of land helps in identifying land owners and facilitating real estate transactions. HM Land Registry was instituted in 1862. However, there was no obligation for landowners to register their properties. In 1997, the Land Registration Act was formulated to compel all landlords to register their properties. Some people registered voluntarily while others only registered their properties during conveyance. This means that there are still real estate owners with the unregistered land. A good number of these belong to churches and the crown. Over 80% of properties in the UK are registered.

While some people register their properties during conveyance, others register when changing ownership. For example, couples who live like joint tenants may switch to a common tenancy to get a better hold of their properties. Joint ownership does not specify the amount of share each partner owns. Inheritance of joint ownership properties is marred with ambiguity since the law does not recognise wills. Getting into common tenancy allows partners to draw to wills which clarify property inheritance.

The Land Registry handles the property registration and transfers. A landowner has to prove ownership of the land for his property to be registered. Title Deeds are the most common proof of ownership. He must also pay a fee and fill forms that facilitate registration. You do not need a solicitor to help you with registration. The Land Registry can guide you through the steps of registering property. However, a solicitor can help speed up the process or explain clauses that are not clear.

Registration of land helps in speeding up conveyance. Solicitors are usually expected to research property ownership and recover Title Deeds. They do this by colluding with the Land Registry. The Land Registry does not document unregistered properties. This makes it difficult for buyers’ solicitors to verify ownership accurately. They have to rely on sellers’ Title Deeds to confirm ownership. Sometimes they have to register the property at the very beginning of conveyance to avoid disputes arising from ambiguity in ownership. If the seller loses his Title Deeds, the conveyance may be entirely impossible.

Property registration protects owners from claims of adverse possession and squatter rights. Homeless people can informally claim ownership of a property that is not registered. It takes a lot of court battle and trips to the Land Registry to reclaim a property from undue possession.

Unregistered properties make it difficult for potential buyers to know their owner. If a buyer wants to purchase a property, he must identify its owner. He can do this by asking people who live around the property. These people must have seen the owner and may even have his contacts. The buyer can also ask around in the local clubs, shops and other social centres. Local electoral registers may also have the name of the owner.

If inquiry fails to identify property owner, you can go a length further to put a sign post on the property. The sign post should mention your intention to buy. The buyer will see the sign post and contact you. You need to talk to a solicitor before posting the sign. The solicitor will advise you if it is illegal or not to post the sign.

Types of disbursement when selling house

12/12/2016

Buyers and sellers encounter various kinds of disbursement fees during conveyance. The disbursement when selling house does not include solicitors’ fees. They are totally separate from solicitors fees and are individually much less than solicitor fees, but can cumulatively be more expensive than the solicitor fees. The disbursement fees are for other institutions or individuals who help the conveyance progress. The buyer or seller pays the fees indirectly through their respective solicitors. The number and amount of disbursement fees depend on the property on sale and the amount of documents required to complete conveyance. Solicitors usually include the expected disbursement fees in the initial client care letter that they send to a buyer or seller.

Official Disbursement Fees

The first beneficiary of disbursement fees is the Land Registry. Almost all property transactions involve paying some fees to the Land Registry. The fees are paid for title deeds, and title plans are made available by the Land Registry. Both the buyer and the seller need these documents and therefore have to pay the fees. The seller needs these documents to prove his claims as the authentic owner of the property and the buyer needs the documents to prove that indeed the seller is the owner of the property. It is the solicitor’s job to get the documents.

Registered titles attract additional fees apart from the fees for title deeds and title plans. This is because registered titles are protected by additional provisions that are spelt out in a separate document. The document, just like the registered title, is kept at the Land Registry. Registered titles are especially common with properties that are built by developers as part of larger estates. The cost of the title register and title plans is £14 while that of the document is £11. Solicitors used to physically present themselves to the Land Registry’s office to get the document. Currently, the document can be downloaded from the website of the Land Registry. A downloaded document is cheaper. Some solicitors pay the cost of the provisional document from their own pockets rather than bill it separately.

Taxes are another disbursement fee that is necessary expense before the purchase can go through. Many of these taxes like Stamp duty depend on the cost of the property. A buyers solicitor will also analyse if the seller has taxes or expenses due on the property.

Other Disbursement Fees

A seller can also look into Telegraphic Transfer fee. The solicitor charges these fees for the expenses incurred when transferring funds to the seller’s financial institutions. The institution charges solicitors the transfer fees and the solicitor consequently charges his client the same as disbursement fees. Telegraphic Transfer fee comes about when large sums of money are paid to cover for mortgages or when proceeds of property sales are transferred directly to a seller’s bank account through the Clearing House Automated Payment System (CHAPS). CHAPS transfers money to a bank account in one day. BACS transfer is slower compared to CHAPS.

Some solicitors may take advantage of their clients and charge disbursement fees that are higher than the Telegraphic Transfer fees. They can do this since clients never really know the cost of the transfer. The transaction is between the solicitor and the bank. Solicitors who overstate the Telegraphic Transfer fees breach the first rule of the Code of Conduct. The solicitors may also breach the second rule of the Code of Conduct when they fail to declare the amount over the cost of the fee as profit. Dishonesty in handling telegraphic transfer fees is punishable by law. The seller can report such misconduct to the Solicitor Disciplinary Tribunal.

Land Registry fees and Conveyancing

16/11/2016

An additional cost when you move houses or change anything in the ownership are the Land Registry fees. What are these fees and why do you have to pay them? The Land Registry is a governmental agency responsible for every change you make in a title to the property and for all the details regarding a house owner. Any alteration must get through the Land Registry, so you are protected against squatters or tenants and to actually be the legal owner of your house.

Starting with 2014, the Land Registry system changed, and you are able to send any modifications and the necessary paperwork online, which saves you time and also considerably reduced the costs of the Land Registry fees. The difference between posting the alterations by post and by email can sometimes mean hundreds of pounds still in your pocket. You can check if your property is eligible for the electronic platform on the government website. The cost is significantly reduced for bigger properties, where the fee is lower even with £500.

What do you pay Land Registry Fees for? Anything from adding/removing a person from the property title, boundaries amendments, change of name, cancellation of the lease or equity sharing lease constitutes an adjustment to the property title, and there are different fees to be paid.

How can you pay the Land Registry fees?

  • By cheque or postal order
  • Credit/debit card/cash at one of the Land Registry agency, by appointment
  • Variable direct debit, through a Business e-services account

If you plan on buying a new residential property, we recommend a Land Registry search before the transaction. The search will reveal if the seller is the legal owner and if he has the right to sell. Also, there is information about the owners' equity (if the house is under Shared Ownership), any mortgages or leases and details about title registers, any plans or alterations brought to the property in the past and specifics about prior and current owners.

The related costs depend on the value of the property, application type and ownership transfer – in the case of a shared ownership and you only buy an equity (part), or you are the only owner (whole). To this, we add the difference between applying by post or on the digital platform.