In simple terms title deeds are a passport for property.  They show who owns a property and if the property is mortgaged or held under a trust, any rights or covenants affecting the property and any restrictions upon the current owner’s ability to sell.

For properties registered with the Land Registry, this information is kept digitally forming a vital part of the official records for property ownership in England and Wales.

Another aspect of a modern day title register will show the class of title.   There are several “classes” of title with the most commonly seen being Title Absolute, Possessory Title, Qualified Title and Good Leasehold.  It is an important part of a conveyancer’s consideration of a title to ensure that the class of title is sufficient and to understand, in some cases, why an absolute title has not been granted.  To explain the relevance of each class, it should be noted that :

Title Absolute

Is the best class of title and that granted in the vast majority of cases. In issuing a title absolute the Land Registry is guaranteeing that there is no risk that any third party can claim a right to the land.  This is therefore the most secure class of title issued by the Land Registry.

Possessory Title

Is seen most often with parcels of land but sometimes with a property title wherein the deeds have been lost previously and the title had to be reconstructed.  For example, this class of title can be granted in cases where a person claims to have acquired the land by taking over possession of it from the true owner in cases where the true owner cannot be identified or has not accessed or used the land for a long period.

Once a possessory title has been held by the registered proprietor for 12 years without a third party claim or issue, then this class of title can be upgraded to form the preferred Title Absolute.

Good Leasehold

This is issued when an application to register a leasehold property is made but the title of the freehold owner (landlord) has not been produced by way of evidence of to the Land Registry.  Usually this is because the freehold title is still unregistered or when the deeds of the freehold owner are missing.  Basically it means that the Land Registry cannot approve the landlord’s entitlement to grant the lease out of the freehold title and cannot guarantee title to the freehold interest which means the validity of the lease may be open to challenge.  Equally the property could remain subject to unknown covenants rights reservations or incumbrances affecting use of the leasehold property.

It is however possible for a good leasehold title to be upgraded to title absolute depending on the freeholder’s ability to produce title and as such a right to the freehold interest.  A Good leasehold title can often be unacceptable to mortgage lenders as the lender’s security is at risk.  Lenders who are willing to accept this class of title set out strict requirements before they will accept the security.

A lender might accept an indemnity policy now, but it might not in the future and all lender’s requirements will vary.

Whilst an indemnity policy can be obtained, it does not resolve the underlying issue.

Qualified Title

This is the least desirable form of title and is granted where there is a specific defect that has been identified and this will be recorded in the register.  There may be conditions on the right of ownership to the property and can happen when there are leases, mortgages or other adverse claims upon the property.  Often this type of title is issued when there is evidence of a breach of a Trust wherein a proprietor would take ownership in the land subject to the interests of any of the beneficiaries under the Trust.

If there is evidence of non-compliance with planning conditions or the planning conditions have not been met on a new build property then there is a risk of enforcement action from the council which can result in a qualified title class being granted on first registration.

Another instance when qualified title can be issued is in instances of a boundary dispute.  This could arise when a neighbour claims to have purchased part of a garden from a previous owner but no documents are available to justify this claim.  The property title could then be downgraded to qualified title because there is a risk that the neighbour could later locate adequate evidence of their purchase and take ownership of the disputed piece of garden.

Qualified title can also be upgraded if additional evidence to validate such a claim is made to the Land Registry to prove that the reason for the qualified title has now been satisfactorily remedied.

How We Can Help

If you have any questions, please feel free to contact me on 01283 214231 or at j.stewart@timms-law.com.