Property developers often face a number of hidden title issues that can derail a project. The best way to avoid any unwanted delays or unwarranted costs is to make sure you investigate with early due diligence and ensure you have made all relevant checks with expert legal advice.
So, what common title issues can occur?
- Chain of title problems / Missing documents
An unclear or broken ownership history can lead to uncertainty over who holds legal title. Incorrectly executed documents, such as missing signatures or incorrect dates, can also cause significant delays.
- Encroachments
Encroachments occur when a neighbouring structure, such as a fence, wall, driveway, or even part of a building crosses over the legal boundary onto your property. They may seem minor at first glance, but encroachments can create significant problems, such as delays in securing planning permission or can create legal disputes over ownership and access rights.
- Positive covenants
These are obligations placed on the landowner to perform certain actions, like maintaining a fence or allowing access for certain functions or to specific people. These are not always be apparent until it’s too late.
- Boundary issues
Disagreements over the exact location of property lines can affect planning permissions, access rights, and lead to disputes with adjoining landowners.
- Restrictive covenant violations
Certain covenants may restrict building work, limit use of the land, or even design elements of structures. Breaching them can result in enforcement action or the need to redesign your plans. https://landandlaw.co.uk/restrictive-covenants/
- Liens
Outstanding debts or unpaid taxes attached to the property can remain enforceable, even after purchase. These financial claims can interfere with your ownership and financing.
How can you offset these risks?
When it comes to title issues, it is about solving problems – hopefully before they arise. It is about stopping any issues from impacting your project in the first place. Here are some actions you can take to mitigate the risks:
- Commission a Title report
A professional title report can provide a comprehensive understanding of the property’s legal status. It is arguably the most important step to identify title issues early. https://www.gov.uk/search-property-information-land-registry
- Secure title indemnity insurance
So, if you have found issues that cannot be easily resolved, for example a missing document; title insurance provides financial protection against losses stemming from those faults. It can be a quicker and more cost-effective solution than addressing the defect directly.
- Conduct a boundary survey
A boundary survey can clarify the physical limits of the property and can help to prevent boundary disputes and unintentional encroachments as well as rejected planning permission.
- Check Local Authority records
It can be unlikely that all risks will appear on the title alone. Local Authority records can show things like public rights of way, planning constraints or development restrictions that could affect the site.
Hidden title issues are a bit like dry rot in a charming house – you won’t see the damage until it’s too late, and by then, it’s already costly. These quiet culprits can cause loud problems.
The good news? You just need a solid checklist, a good solicitor, and a willingness to dig a little deeper than the surface. Because in property development, it’s not just about building up—it’s about checking what’s buried underneath.
So, before you break ground, do your groundwork.
Glossary
Easement – Legal rights that allow one party (the dominant owner) to use the land of another party (the servient owner) for a specific purpose. E.g. rights of way; rights to light; and rights to drainage.
Encroachments– An encroachment occurs when a property owner extends their structure or use of their property onto a neighbour’s land without permission.
Indemnity insurance – An insurance that protects from financial loss due to a defect in their property’s legal title. This insurance is often used when a problem with the title is discovered during the conveyancing process.
Restrictive covenant- Consistsof an agreement in a deed that one party will restrict the use of its land in some way for the benefit of another’s land.
Title – Is a term that signifies the rights of ownership and possession of a property. The title includes the owner’s legal rights to sell, let or transfer the property.
Title register – The title register contains details about the property or land. It includes:
the title number; who owns it; what they paid for it (properties only, if available); any rights of way; whether a mortgage on it has been ‘discharged’ (e.g. paid); whether the property is freehold or leasehold; the lender’s name and address (if there is a mortgage on the property).