Fresh from her column in the London Evening Standard, Fiona McNulty answers questions on selling a property that has access problems at auction, and what it means if your property deeds have been dematerialised.
Q. My sister and I are Attorneys for our grandfather and we are trying to sell his cottage, as he has now gone into a nursing home. We have joint agents but they have both struggled to find a buyer; they say it is because there are some access problems – the garden is separate from the house and there is an issue with the farmer and the right of way to the garden. The agents have suggested we now try to sell the cottage by auction; do you think that would work?
A. Yes. Properties which are sold at auction do tend to have problems with the title, or are unorthodox or tricky in some way. Of course, that is not always so, and many properties which are not in this category are also sold by auction.
The access issue which you have may be putting off prospective buyers who want to purchase the cottage as a home, because they may not have the time or the inclination to take on the problem. However, many investors and property developers consider properties with issues such as yours to be attractive because they are often able to buy the properties at reduced prices, and they are likely to have the funds and time to resolve the issues.
Presumably, you have to sell the cottage to pay your grandfather’s nursing home fees. With an auction, you can be sure that the price you achieve for your grandfather is fair and, once the auctioneer accepts a bid by the fall of the hammer, there will be a binding and enforceable contract, which will give you and your sister some certainty.
Q. I have a boundary dispute with my neighbour, and my solicitors have asked me for my pre-registration deeds so that they can check the boundary position. When I asked my building society for them, they told me they didn’t have them because of “dematerialisation”. What do they mean by that? And isn’t the Land Registry plan definitive as to boundaries?
A. Since the Land Registration Act 2002 was implemented, all paper deeds have been dematerialised. This means that, from October 2003, the Land Registry no longer have paper deeds but, instead, evidence of title to property is held electronically at the Land Registry on a register.
Most lenders decided to opt for full dematerialisation, which means that they do not keep any deeds at all, and actually return original paper deeds to their borrowers. Some solicitors look after deeds for their clients and, in many cases, people retain their own deeds. It is really important that to keep your pre-registration deeds in a safe and secure place.
When a property is first registered at the Land Registry, if the original deeds make reference to boundary ownership, this is noted on the title register and the extent of boundaries will be shown on the plan, which is known as the Title Plan. However, the Title Plan does not usually show the exact position of the boundaries because the boundaries shown on plans drawn by the Land Registry are only general boundaries, and so the position of the boundaries may not be the same on the ground.
Pre-registration deeds often describe boundary features in detail, which is why your solicitors would like to see them, as they may assist with your dispute with your neighbour.