Dealing with an unregistered property title

Many homeowners are unaware of their property being unregistered, and of the complications and delays this can cause during the sale process.

Prior to the Land Registration Act 1925 (‘LRA 1925’), the method used to prove ownership of land was a deeds-based system. Each landowner would hold a pack of physical title deeds, which acted as evidence of their right to the legal ownership of the land or property.

The LRA 1925 introduced the system of land registration that we use today, which is a copy of entries produced and maintained by the Land Registry. This removes the requirement of producing the pack of physical title deeds when it comes to buying or selling the property for proof of ownership. This legislation has recently been repealed and replaced by the Land Registration Act 2002.

The process of buying or selling an unregistered title varies from buying or selling a registered title. There are a few key areas of which you should be particularly wary.

Compulsory registration and trigger events

The whole of England and Wales is now a compulsory area of registration. This means that when certain ‘trigger events’ take place, unregistered land must be the subject of a first registration application at the Land Registry. The main triggering events are:

• A conveyance on sale of freehold land
• A grant of a new lease for a term of more than seven years
• The assignment on sale of a lease having an unexpired term exceeding seven years.

An application must be made to the appropriate Land Registry for the first registration of the title within two months of the date of the triggering event. Therefore, when it comes to buying unregistered land or transferring the legal title to another individual, you will see that your conveyancer will be looking to carry out the first registration on completion of the relevant transaction.

You can also do a voluntary first registration on your own unregistered title.

A good root of title

When it comes to buying a property with an unregistered title, your conveyancer’s main concern is whether a good root of title will be passed to you on completion of the transaction. To determine this, the conveyancer will be looking at the following:

• The good root document is the document that shows that the seller is the current legal title owner and must be at least 15 years old at the date of the contract.
   
• The good root document contains an adequate description of the property.
   
• The conveyancer will be reviewing any plans attached to the document to see if the description matches the plan. If the plan is old and does not match the extent of the boundaries of the properties at the time of the transaction, a new plan will be requested. Furthermore, the conveyancer will usually ask the seller’s conveyancer to carry out voluntary first registration if the plan that has been produced is unacceptable so that the plan produced to you on the exchange of contracts is guaranteed to be acceptable by the Land Registry. This will decrease any post-completion issues at the Land Registry when applying for first registration.
   
• The conveyancer will also check the pack of deeds to see whether there have been any previous triggering events where first registration should have taken place.

Involvement of the lender

Many of the points mentioned above are relevant when you purchase a property with the help of a mortgage. The conveyancer will need to ensure that a good root of title is available to you and the lender. If this cannot be produced, the lender will not be willing to provide you with a mortgage to fund the purchase.

When selling a property that is unregistered, the conveyancer will be reviewing the physical title deeds, specifically the legal charge documents, to ensure that the charges are redeemed. With the legal charge documents, the lender will usually put a note on the physical document confirming that the charge has been redeemed in full. 

If the document does not show any evidence of discharge of the charge, your conveyancer will write to the lender for confirmation of whether the charge has been fully redeemed and if not, how much is left to be redeemed.

Our solicitors can help you understand your options 

The above is a brief summary of some of the key aspects of dealing with an unregistered property title. If you have any further concerns or queries regarding this, please contact our residential property team.