House with no deeds - mortgage payments due

[HouseHassle]

I will try and bullet point to make it simple but would welcome any advice regarding the current situation please!.

Relative died last year. I am 90% beneficiary in the will, with 10% going to a third party who is also the executor. Individual not solicitor/company.

Given 12 months grace on mortgage (until Sept 2023). Got the house sorted and saleable. Estate agent instructed comes back to executor to say cannot be marketed as no deeds.

Land registry seems to raise more questions, freehold or leasehold, can't remember which (it's one house that was split into two separate properties before my relative purchased) for both properties is in the neighbours name, who bought the house around 15 years after my relative bought theirs.

House was originally bought 40 years ago. Mortgage was held with one bank who changed hands several times - C&G > TSB > LloydsTSB > TSB before ending up with Lloyds bank (potentially with a remortgage)

Around 2007 there was a boundary dispute with a neighbour. Solicitors instructed but no idea of the outcome. May not have been followed through but was certainly with solicitors for a long time (I was with relative several times when they went in to query about progress).

Current position is that a separate solicitor has been instructed to work out what's gone on with apparently zero movement since May. All places are saying there are no deeds held. This is now being looked into by a paralegal whilst solicitor is on leave.

Lloyd's bank are now saying that the mortgage now needs to be paid and that I am liable for this (as a beneficiary, not an executor) or legal action will be taken. Is this right? Do we have any argument that actually, at some point the bank have caused this problem by giving a mortgage without having any deeds?

It's all a bit of a foreign language to me, I've never bought or sold a house, but will answer any questions as best I can!

@HouseHassle If the separate solicitor is making no progress I would

• contact Lloyds and ask them for a copy of all deeds they hold. It would be very unusual for them not to hold them if they have a mortgage on the property. See note below.
• Then follow the trail back e.g. do a request/SAR request for each of the banks/building societies asking for copies of all documents they hold.
• I am not clear what is registered with Land Registry, get copies of the plans and register. The register should show any deeds held by LR. Fill in the form and request copies of those deeds. Do this for your relatives house, the other part of the property and also the freehold.
• Go through all of the above, identify any professional organisations e.g. solicitors, banks, building societies etc. who may at one time have had the deeds. Also look for evidence of contracts, transfer docs etc. these form the root of title.
• Contact the solicitors who dealt with the dispute and again ask for copies of any relevant docs.
• Try to build as much evidence of who owned the property when so you can hopefully make a first registration.

Note:

1. A mortgage company either holds the deeds or the land certificate as evidence the mortgage is secured against the property. Some pointed questions to Lloyds about what evidence do they have to prove they secured the mortgage against this property may chivvy them to find the deeds.

1. I am slightly surprised that the property/leasehold was not registered when the mortgage was taken out. From memory 1989 was when compulsory registration for all of England became law. So over 30 years ago.

@Sisterpita thank you for taking the time to reply. My understanding is that all leads have reached a dead end, all banks and solicitors ever involved are coming back that they have no deeds. The original solicitors for the purchase are long gone too. The executor has been chasing and digging and investigating since May.

None of it makes sense and like you say re: lloyds how can they repossess a house they have no deeds for? The executor came home to letters today requesting a mortgage payment by 1st Sept subsequent calls to the bank have only resulted in "call us back in 2 weeks".

Also, how can the previous solicitor have worked on a boundary dispute, without the deeds to know what the dispute actually was?

Someone (maybe at more than one stage?) must have cocked up somewhere.

Meanwhile I'm expected to find money for mortgage payments every month, with the threat of legal action if I don't, for a house that can't be sold (or repossessed?). How can that possibly be right?

All the best op

I am not a lawyer, but surely you cannot be held liable for a mortgage as the beneficiary, that would be owed by the estate? Also when I took out my mortgage a requirement was to have life assurance that paid off the mortgage if I die, every mortgage I've had has required evidence of this, was there no insurance?

The estate owes the money, not an individual

Ive always had my own deeds, the mortgage companies for each property never had them

Is there money from the estate. Otherwise I can’t see how you would be personally liable

The only money left is the house. Valued at approx 100k with approx 65k mortgage outstanding. Not talking millions here. No sign of any insurance policies or anything.

Hiya, I don’t think that there’s no deeds as such. I think it’s that the house isn’t registered with the land registry and there’s no pre registration deeds. That’s only my assumption from what you are saying, the solicitors may need to reconstruct them and complete a first registration on the property.

@HouseHassle I did wonder how far the investigations have gone. I assume you have also been through all the paperwork and found nothing.

Really the solicitors should be advising you and the executor.

All I can say is gather all the evidence you can e.g. the lease of the other property - it is likely there’s mirrors the one for this property. It should also show who the freeholder is. They may have a copy of the lease. Copies of the mortgage deeds. Copies of council tax bills going back as far as you can. Then talk to Land Registry - they will be as helpful as they can be.

I think @Mum14569 has hit the nail on the head.

When you say it was spilt do you mean into flats with significant common liabilities to repair etc? If so it's likely to be leasehold which makes title a level more involved.

Years ago I worked for a trust corporation. We lost the deeds for a property where we were appointed to act for one party to what, IIRC, was disputed ownership. They'd been delivered to the office but the organisation was in chaos and they just disappeared.

An outside solicitor was appointed to reconstruct the title. A very skilled process but one well known in the legal profession in the days before everything was registered. I could name the firm concerned though I think the partner who did it, a man I'd trust with my life, has now retired.

Problem these days is that conveyancing has become a process governed by SOPs and thus de-skilled. Front of house staff are useless outside the box whose contents they're trained to deal with.

If Lloyds lent on it they must have had some security. Either they had the deeds or they knew who did (eg if their security was #2 in the pecking order).

I cannot see, unless you've signed some personal covenant, why you are personally liable for the mortgage.

You need a specialist solicitor and a chat with somebody at Lloyds who actually knows what's what.

If there is a mortgage, there must have been deeds and since 1997, properties were automatically registered with the LR. You can check for £3 online.
If the house isn’t registered with the LR and the deeds can’t be traced, the deeds can be reconstructed ( at a cost!) there needs to be proof of continuous ownership going back at least 10 years. This would be the Mortgage company’s responsibility if there is still a charge over it.
I only know this because we were at this point in 2020 during lockdown -
if we hadn’t finally tracked down my FiL’s deeds to deep archive storage with Barclays, who took over the Woolwich, who were the original mortgage company, we would have had to go down this route.

My FiL’s house was unregistered as the mortgage had been paid off in 1995.
If we hadn’t have had his original Woolwich mortgage docs, we would never have found the deeds, plus there was one helpful Woman who had gone from Woolwich to Barclays and it was pure luck that I spoke to her one day when trying to trace them. It took 3 months for someone to physically find them in the archives in Liverpool and only because we had the original reference number! Absolutely bonkers.

@HouseHassle I am a pragmatist and sometimes even though you may be giving up some of your inheritance it may be the best approach.

The facts are with the deeds the house is worth £100k less £65k mortgage = £35k. Without the deeds the house is worth £0 and the estate had a debt of £65k. It will not take long for legal fees and other expenses on the house e.g. council tax, utilities to eat up the £35k.

There is no point in anyone paying the mortgage because this will never be repaid. If you don’t make the mortgage payments after a long period of Lloyds will repossess and try to sell the house. This will rack up legal fees for Lloyds. Call me cynical but at that point they may find the deeds.

My suggestion is talk to the executor, seek legal advice and write to Lloyds. In the letter contest the validity of the mortgage by asking for a copy of the evidence they have that shows the mortgage is secured against the property I.e. the deeds or Land Cert.

Point out that without the deeds the house is worthless and so you will not be paying the mortgage. Advise them rather than letting Lloyds repossess the property you are considering handing back the property to Lloyds. Ask them once again to have a thorough search for the deeds. Give them 30 calendar days to respond.

After 30 days write and hand back the property, give them the keys etc. make sure the property is empty and clean. Take photo’s and videos of the house and garden so you have evidence of the state of the property on handover. I would also make it clear if they eventually find the deeds in their possession you will claim compensation.

In both repossession and handing back the house should Lloyds sell the house for more than £65k, and manage to clear the mortgage and all fees, charges etc. then the Estate would get the remaining funds.

I would also be making a complaint to the relevant financial ombudsmen that Lloyds have lost the deeds.

I know 90% of £35k (£31,500) seems like a lot to give up but realistically this will be significantly reduced by legal fees, costs to find the deeds, paying utilities etc. The one thing I would consider paying is the buildings insurance as a fire or flood would devalue the property.

I know it’s not the answer you wanted but it may be the most cost effective way to proceed.

Thank you for all the replies.

@Sisterpita I can see how handing the house over to the bank would be the easiest option, but kissing goodbye to any inheritance at all would be a big decision. There is currently no money owed - all utilities are in credit, credit cards were in credit, there is no debt anywhere apart from the mortgage. The executor has dealt with everything up to this point so there are no solicitor fees until we start looking at this fiasco.
As for me - we rent, we have no savings, the small amount we did have has just gone on (fairly essential) private medical stuff for our son who is disabled and will unlikely ever live independently, have a job etc. We drive 14 and 17 year old cars, the latter of which is unlikely to survive its mot in October.

Even a few thousand would be a big cushion for us right now. Double figures would be credit cards paid off and savings back to where they were before the medical stuff.

@HouseHassle I do understand and you have to make the decision that is right for you. All I wanted to do is point out some options and to be mindful how quickly the money can be eaten up.

It sounds like this property has unregistered title. If the house was built before 1925 and the last transaction was in the 1980s this is a distinct possibility. Unfortunately, deeds were physical documents and banks were notorious for losing them, although fortunately most land is registered these days.

As you are now the beneficiary and the property is to be transferred to you, this is a registrable event. You should instruct a solicitor to do a first register of title completing form PG2. Don't try to do this yourself, find a conveyancer with experience in unregistered land. They can pull documentation together to demonstrate your ownership. You might not have title absolute when you sell but it should be possible to get qualified title and sell with the appropriate insurance.