One of the key things we as conveyancers do is run property title searches on behalf of our clients. It's important to help us understand who has legal ownership of the property or land we're dealing with, what their stake is, and any special considerations that need to be made if our client wants to buy it. But did you know that there is more than one type of property tile? In fact, there are 4, and each means something different for a prospective buyer.
Absolute Title
The absolute title is the biggest class of ownership there is, and is given to most of the registered freehold titles. In other words, anything that isn't a leasehold. There are a few exceptions, usually where there is a defect in the title, or there's some evidence missing, and in these cases the Land Registry can't absolutely guarantee that no one else will claim ownership of the property.
If you were looking at a leasehold, then the Land Registrar might grant the absolute title along with approving the lessor's title. But this outcome is rare, since the registrar isn't usually in a position to both validate the lessor's title and the leaseholder applying. It gets a little complex, which is why you need an expert.
Possessory Title
A Registrar may grant a possessory title when the owner can't provide enough paperwork to prove ownership, such as freehold or leasehold title, or if they receive rent from the property, or claim they've acquired the land through adverse possession. This type of title is given when ownership documents are missing or don’t exist.
Possessory titles are relatively rare and are often linked to claims based on "Squatters’ Rights" or adverse possession. Mortgage lenders are usually hesitant to offer loans on properties with a possessory title, but in some cases, title insurance can be used to protect the lender. After a certain period, a possessory title can be upgraded to an absolute title.
Qualified Title
Qualified titles are there on paper, but they are quite a rare find in practice. They’re only awarded when the title submitted for registration is subject to certain reservations, or it’s been identified as having some specific defect that can’t be overlooked.
It’s quite similar to the absolute title, but there’s no guarantee in place when it comes to the details. For example, when a title is submitted for registration and there’s evidence of a breach of trust, a qualified title is granted. This means the proprietor would take ownership in the land subject to the interests of any beneficiaries under the trust, with titles granted to both freehold and leasehold interests.
Good Leasehold
A Good Leasehold title is something that only applies to leasehold properties and land. The Land Registrar only grants this title in certain situations. Mainly when:
The freehold is registered with a title less than absolute.
The freehold reversion isn’t registered.
The applicant for leasehold registration doesn’t submit proof of the title to the freehold reversion.
The bad news here is that lenders generally find a Good Leaseholder title as not good enough, which can make it difficult to get a mortgage. If you’re on the other side, it can also make it difficult to sell, which is why it’s one of the least desirable property titles you can get.
So you see, it’s not as easy as it seems! And this is just one of the searches that conveyancers will do to help you buy a property. If you would like to know more about property searches and title deeds, or the conveyancing process in general, just get in touch with the team today, and we’ll be happy to help.
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