Author: Shona Arnold
Qualified titles are rare and are granted when the title documents submitted to the Land Registry are subject to certain reservations or are identified as having some defect that cannot be disregarded.
Although qualified title is similar to absolute title, the Land Registry’s guarantee in this case will not apply to the defect in consideration.
Some examples are:-
· Where there has been a boundary dispute. For example, if a neighbour claims to have purchased part of the garden from a previous owner but are unable to provide any documents to evidence this, the title may be downgraded to a qualified title because the neighbour could later find and produce evidence of the purchase and claim the disputed part of the land.
You can only upgrade a qualified title if you can provide additional evidence to the Land Registry that the reason the qualified title was granted in the first place has been remedied.
Whether or not you can obtain a mortgage for the purchase of a property with qualified title will be at the lender’s discretion and will depend on the level of risk associated with the qualifying issue. If the lender considers that the qualified title will prevent them from recovering their monies in the event of repossession, they might refuse to lend. If they do lend on the property, the greater their risk, the less favourable the mortgage terms are likely to be.
Good leasehold title applies only to leasehold interests. Good leasehold title is granted when the Land Registry decides the freehold title or headlease has not been satisfactorily deduced. Often this is when the freehold title is unregistered and the deeds are missing.
Good leasehold title is only acceptable to the majority of lenders in limited circumstances.
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.
- Losses, including damages and compensation awarded against you;
- Difference in market value;
- Cost of court-ordered works;
- Cost of settling out of court (as agreed with insurer); and
- Other related costs and expenses.
You cannot obtain good leasehold title indemnity insurance if there is already a challenge to the freehold.
If the freehold is already being challenged, you are unlikely to be able to obtain a mortgage on the property.
A good leasehold title can be upgraded to title absolute. However, this is dependent upon the production of documents which prove the freeholder or landlord’s right to the freehold.
