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I am looking to bid on a freehold house coming up for auction. The property has a number of issues, which I think are not insurmountably. We will be buying for cash and looking to refinance at a later date, which should give us a bit of time to sort these issues out. I would however welcome advice regarding Land Registry registration.
The house is divided into two flats, but is currently unregistered with Land Registry as it has been owned by a single family since 1927. I understand that the registration process is long, but I am unsure of the steps that need to followed and the right order to go about things.
Any advice or pointers towards things I might need to think about would be greatly appreciated! This will be my first auction purchase so I really don't want it to go wrong!
I've bought several at suction and would never buy unless my solicitor has gone over the legal pack and answered those questions for me. It only costs me £99 But money well spent. You may have to shop around as I was once quoted £450. If you are having trouble finding one then contact the auctioneers as they have these solicitors at the suction usualy. But you want it checked over b4 that.
From my own knowledge land registry won't care what state the house is in provided you are buying the whole house, they will change it into your name. You won't get a mortgage untill it is all legal and properly converted. You also wont get a mortgage until you have owned it for 6 months.
If you go online you can check the planning portal at the relevant council to check what has had planning and what hasn't. Also look at the deeds in the legal pack to see if it's ever been split into flats.
Good luck with your endeavours
Thank you Derek - have contacted the auction house for a solicitor recommendation, but the solicitor they have recommended has quoted £550! Would you mind providing me with the details of who you have used in the past? Also, I have checked the council planning portal and there is nothing on the house ever having being split legally.
That's surprising because at every suction I go to they have solicitors there willing to do pre auction checks for you for around £90. Did you ask for a pre auction check? They go though all the legal documents and highlight any issues..
Otherwise I use Carpenters solicitors of Wallington, Surrey.
The issue is that if the property isn't registered the only way of establishing whether the property is an unencumbered property owned by the person selling it is to plough through the Deeds. I don't know enough about Conveyancing to know what this entails, except that this is what used to be done in the days before Land Registry and that it takes a long time, and is expensive. The problem isn't registering at Land Registry, it is establishing whether you will actually own the property after you have paid for it.My immediate thought is that there may be a legal problem, because I can't think why anyone would put an unregistered property into auction. You need to speak to an experienced solicitor (I'd say not just a Conveyancer) about the cost of doing this work, or even whether it is feasible in the timescale.
Thanks Nick - it look a there is a clear chain of ownership, but you are right, I can't think of a reason why they haven't registered the property so far!
I brought at auction in October last year using Fosters. The house has been refurbed and is on the market, during the refurb I checked with the Land Registry and lo and behold the title had not been transferred. I won't bore you with the detail but the Land Registry process is long and that's after chasing and threatening the solicitors with legal action - that's a year after we completed.. I doubt you could get the issue resolved within the 20 days and as Nick said you'd need a very good solicitor. Good luck
Morning - and sorry for the late answer to this very good post.This happens a lot at auction and it is a bit of a risk - not so much in your circumstance though.
Solicitors should probably give you the best answer to this question, however, from my experience (not done one of these in the last 5 yrs), if its likely it was converted over 4yrs ago, your solicitor can take out indemnity insurance which covers the cost of converting back to one house if forced to do so by the council. In reality this will only ever happen if a council has concrete proof that it was converted within 4yrs and you can't for whatever reason obtain retrospective planning or it was converted so badly its a large fire risk or offensive to neighbours etc. the indemnity insurance then allows banks to lend on the flats. Sometimes surveyors will value a touch lower as it might not have been converted to building regs standards.
another important call is to building control because if either planning or building control are aware of a breach in planning or building regs it will mean your solicitor can't get indemnity insurance and thus you won't be able to obtain any standard mortgage until planning is in place.
does that all make sense?
regards Andrew Peers - property investor / sourcer - 07912674181
Property Redress Scheme Number 011436 NLA member 174404
Oh and i forgot to mention you have to do some clever legal work too - i.e. buy the house in one legal entity then simultaneously on completion (if you're getting finance on the two flats separetely) your solicitor sells the two individual flats (which you will need to scale (ish) floor plans to another legal entity that wll own the leasehold interests (you will create the leases). the freehold will have a value of circa 10-20k in addition to the value of the flats (often a nice bonus).
regards Andrew - as someone else said, a decent solicitor is crucial to making this happen without too much stress.