Possessory Title on a House

[Thirl123]

Hi need advice on whether to pursue this through the Property ombudsman. Made an offer on a house (cash+mortgage) and went ahead with paying for valuation and a solicitor. Three weeks in and we were told by our solicitor after she had also done searches that house was possessory title only and more risk,. We decided to pull. Now have a big invoice for aborted purchase. Point is should the vendor, agent and the two solicitors not have checked title deeds at the outset and made us aware of this issue before we went to this expense. A title deed can be found at the push of a button!

Is this like leasehold because I've never heard of this?

Your solicitor did their job. They checked the title, reported back what it was and you decided, understandably, not to proceed.

Why would you NOT pay your solicitor for doing their job. That is exactly what you employed them to do.

Unfortunately buying houses is an expensive business. If you embark on a sale and then pull out there will be costs incurred. We've 'lost' about five grand this year on two houses that we eventually lost due to a flaky buyer who messed us around, on solicitor's fees and a useless survey. And had to drop the price of our house too. We're literally tens of thousands worse off than we would have been if our buyer hadn't been flaky and we'd bought the first house. Nor would we be living in a rental for 3 months right now.
You really need slack in your budget for this kind of stuff I'm afraid.

Your lawyer did her job within a reasonable timescale. She is entitled to be paid.

Plus, the Property Ombudsman is for rent disputes and not private sales isn’t it?

A title deed can be found at the push of a button!

which is what you could have done

Three weeks' work should not be a large bill. Searches done within that timeframe is pretty quick. Some of the initial work may be useful on your next purchase as would a Mortgage fee. Are you ftb or selling too?

Possessory title isn't necessarily the end. Did you explore options such as reducing the price, getting insurance and upgrading the title before pulling out?

Thanks for all your replies. What I failed to make clear is that the agent, seller and her solicitor ( not mine) all knew it was possessory title from the outset but didn't divulge it until my solicitor found out 3 weeks in. That might alter your view!

Was it on the particulars or memorandum of sale?

What is your bill for - the mortgage valuation, survey or legal work ?

Valuation - if you have instructed this then the work will have been done and the valuation should take into account the class of title as part of the final amount. It may be the agreed price is in the correct region for a possessory title.

Survey - this will look at structural issues and is not really concerned with the property's class of title. Again, if work is instructed by you then it should be paid for.

Legal - the standard process is that you instruct your solicitor, who will then contact the seller's solicitor and request evidence of title and other property information from them (otherwise they could be looking at the wrong property, incorrect boundaries etc). They will then carry out due diligence on the property for you, review title and search results etc and report any issues and potential solutions to you (for example indemnity insurance - have you considered this as an option paid for by the seller (assuming the mortgage company would accept)).

Ideally, your solicitor could have flagged the title issue immediately before instructing searches and carrying out lots of work (which would have kept these costs down), but conveyancing has been down-valued so much now that it is very much an automated process and solicitors will very often only look at the file once all information has been provided - a side rant but it boggles my mind that people will pay thousands for an estate agent to sell their house but want all legal work carried out for less than £1k when you consider the significant implications if the legal work is not done correctly.

Assuming you were "kept in the dark" about the class of title by the seller, then really that is the seller's fault (or their agents/solicitors). My frustration would be directed there and not at my own solicitor/surveyor as they have only done their job (so far as I can see). I would be taking this up with the estate agents (who do not work for you) and complaining but in reality, there is probably little you can do if you do not want to continue with the purchase. If you do wish to continue, then it could be used as a negotiating point to reduce the price.

The sellers are being very short sighted by not being up front about this issue however, as I suspect they may well lose a lot of potential sales if they are not open about it and price accordingly.

Are you asking if there's some liability attatched to them failing to disclose? Do you think the seller should bare the costs? Or are you just understandably pissed off and venting?

It may be possible for them to get an absolute title depending on how long they've held the land and indemnity insurance is also a possibility. Requiring them to seek absolute title or to drop the price by at least the cost of indemnity insurance might have been other remedies for the situation allowing the sale to continue.

After the land has been registered with a possessory title for at least 12 years, the owner can apply to the Land Registry for an upgrade to absolute title.
www.bishopslaw.co.uk/can-you-sell-land-with-possessory-title/#:~:text=The%20term%20possessory%20title%20simply,name%20to%20prove%20absolute%20title.

I would have asked them to get a title absolute (if they've owned the property for 12 years or more) and then you could proceed with the purchase (at a lower price maybe to compensate for the inevitable delays?)

The sellers are foolish not to do this in the first place, but if they haven't lived there for 12 years they should definitely have disclosed to potential buyers; anyone could come out of the woodwork and claim legal ownership 🙄

Thanks all. My frustration is not with my solicitor. She found it out. The seller knew it was possessory, listed it without telling agent (but they never checked) and then instructed her solicitor after we offered full asking price and her solicitor knew immediately on taking on the property about it not being absolute. So we went through a mortgage lender (not telling them it was possessory) and kept going in the dark. I believe there was a legal obligation on the others to be upfront about this and if there isn't there should be! Not interested in insurance as that is just there in case you need to fight a claim for ownership down the line.