Despite the introduction of the Land Registration Act 1925 there are significant areas throughout the UK that have many unregistered properties. Herefordshire is one such area.
Here at Harrison Clark Rickerbys we often act on behalf of owners of unregistered property whether by sale or purchase or as is becoming more popular through Equity Release schemes. In the past many solicitors have advised clients that registration of their property was an unnecessary expense and that the property was quite capable of being sold etc. whilst unregistered. Whilst the concept may still be true, the fact is that it is becoming more frequent for purchasers (or their solicitors) of such properties to insist on registration occurring before completion takes place.
It has also been noted by our property teams in Hereford and Ross on Wye that some lending institutions, in the case of equity release schemes now also require the property to be registered before granting the charge.
An equity release scheme is where the owner of a property will take out a mortgage with a lender but there are no interest or capital payments made and upon the death of the owner of the property the property is sold and the legal charge is redeemed i.e. payment of sum lent by the lenders together with any accrued interest. The remaining balance is distributed in accordance with the deceased owner’s will. Potential borrowers are often informed that the process is quick and straightforward and that there is likely to be very little delay. It is not unheard of for borrowers to incur fees for renovation works etc. on the assumption that the funds will be available within a short period of time.
With finance companies now requiring properties to be registered and with more frequent delays that are occurring as the Land Registry are having to attend to more and more registrations, our advice to owners of unregistered land is to register it as soon as possible. The fees are relatively low and the Land Registry itself will offer reduced fees for voluntary registration to encourage as many property owners as possible to apply for registration.
Registration will of course establish proof of ownership in a more readable form that that of perusing all the deeds and documents that have to be checked with unregistered property.