These are legal issues which make properties un-mortgageable, un-saleable or plain problematic. They relate to buying, selling and remortgaging of property. These defects can be discovered during title checking, during your inspection, whilst reviewing searches, indicated within your property survey, and / or whilst dealing with enquiries with the seller’s Conveyancer. This is why these are vital (and time-consuming) steps within the Conveyancing process.
NB: Not all properties will have title defects. That’s good! You want to avoid them.
However, If Defects Are Discovered
Indemnity Insurance
Some, not all, defects can be covered with an indemnity insurance policy which has a one-off premium and is instantly obtained. This Indemnity Insurance is passed on each time there is a sale of the property. See my blog article on indemnity insurance policies for more information.
Deed of Variation
Other defects may require amended legal documents or deeds to be drafted. These are sometimes referred to as a Deed of Rectification or a Deed of Variation. This will take more time to deal with since several parties must negotiate, approve and sign these documents. The more parties that are involved the more time-consuming this will be.
Both of the above will result in further costs as these issues were impossible to foresee at the time of your conveyancing quote and will result in additional work.
Any title defects that are discovered will be reported to you, and your lender (if any), as they could make the property poor security. If you have no lender (i.e. you are a cash buyer) then you will be asked to take a view as there is an element of risk. Your Conveyancer will outline the issues for you. Bear in mind you may need to mortgage or sell later on.
Examples of Title Defects & Concerns
• PRC properties (pre-cast reinforced concrete)
• Non-standard construction
• Concrete cancer or mundic on site
• Japanese Knotweed or Bamboo on site
• Giant Hogweed & other invasive plant species
• Leased Solar Panels on the roof
• Subsidence & / or successful mining claims
• Matters which invalidate buildings insurance
• Missing Rights of Way or Access issues
• Land locked properties
• Escalating ground rents (leaseholds)
• Estate rent charges (freeholds)
• Bona Vacantia* freeholders or landlords
• Unknown or missing freeholders / landlords
• Failure of cavity wall ties
• Spray foam insulation in loft
• Lack of firewall with terraced / semi-detached
• Contaminated land indicated
• Flying freehold properties
• Freehold flats
*Reverted to the Crown, for example because the party became insolvent.
The above is not an exhaustive list and standard practice does change over the passage of time. Lenders may alter their positions on certain defects and Conveyancers will act accordingly to amend their standard practices. There are many title defects found today, which were not foreseen 20 years ago. As a result, older Leases will often have defective clauses.
Buyer Beware
REMEMBER Caveat Emptor, also known as Buyer Beware, applies. This means a buyer takes the property as is, subject to all defects and repairs. This means searches, survey and inspection of the property are vital to avoid paying the price later on. It is also worth noting that you and your Conveyancer can raise enquiries with the seller’s Conveyancer but there is no guarantee that their replies are correct. The seller is unlikely to be an expert. You must independently investigate replies or instruct the relevant expert to do so. Your seller should not misrepresent matters but he is not required to volunteer information either.
The buyer always takes the risk when purchasing property.
Structural Defects
Structural defects are also of concern and that is why you must consider obtaining a property survey on any property purchase. Ideally every purchaser would obtain a survey, and act appropriately upon it. This avoids buyer’s remorse post-completion. See my article on Adverse Surveys for further information.
Further Information
Follow my property and conveyancing blog to find out more and to keep up with the latest property issues and how to deal with them. The blog is aimed at homeowners, homebuyers and homesellers. It is also a useful source of information for those in the property profession.
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