You shake hands on a development deal negotiated by your surveyor, sign off the heads of terms, and hand it over to the lawyers.
The transaction is high value, it is important to you, involving land which has perhaps been in the ownership of your family for many years, and one where the buyer is a housebuilder or commercial developer. You want a quick sale, so does the buyer. The transaction terms may be complex, subject to planning, and as owner you want the contract in place quickly with the minimum of fuss and fees. The buyer’s solicitor submits their searches and then you are contacted by your solicitor saying the buyer has identified a boundary issue, the sale is on hold whilst, until, and if it is resolved. This is not a place you want to be and with some forethought and planning the chances of this happening could have been minimised.
Land offered for sale to housebuilders or developers by private individuals has often been registered as part of a larger landholding, a farm of many hundreds of acres for example. The land may have been correctly registered however the boundaries of the farm when seen as a redline on a Land Registry plan will not have undergone the level of scrutiny they will receive from a solicitor or technical team of a housebuilder when buying a particular field or plot for development. Gateways and hedgerows in particular adjacent to public adopted highways may sometimes have been omitted from registration and show up as unregistered parcels or strips of land.
In practice these are often not large areas on the ground. However, on a plan and to a buyer’s solicitor, they represent risk, of ransom or an impediment to a buyer obtaining funding. It is also uncanny how often these areas are just where a main site access is intended to run, or where key service connection points need to be. The Land Registry has rules which allow them some discretion to rectify errors, if the red line on a scaled plan does not follow exactly the features on the ground, and one can apply for the plan to be rectified. This can however take time, which is not welcome when in legals on a sale. An application should be made to HM Land Registry asking them to exercise their discretion and rectify the plan. They can however say no. What then?
An alternative, particularly where the parcel of unregistered land is more significant, is to submit an application to register the land. This may be for title absolute where you can show from your old title deeds that the land in question was clearly part of the original land holding, but was missed off the original registration. An application could also be made for possessory title where the owner can demonstrate that although it does not hold evidence of title it can demonstrate that it has occupied and exercised rights of ownership (to the exclusion of third parties), over the parcel without force, secrecy and permission for a period of at least 12 years.
The owner would need to make a statement of truth to back this claim, and where their ownership is less than 12 years obtain a statement of truth from a former owner to cover any years to make up at least 12 consecutive years of ownership up to the date of the claim. This comes with its own challenges as a hedgerow or grass strip alongside a road, or a gateway, by their very nature are accessible to others. Demonstrating exclusive possession can be a hard task and may not be successful. Addressing issues such as these whilst under pressure when trying to complete a sale is to be avoided if possible. Even if successfully registered, possessory title will need backing with a defective title indemnity policy and bear in mind not all utility companies will accept possessory title when taking an easement to provide services.
If you have land you think has development potential, have a good look at the title, years ahead of marketing it for sale if possible. Ask your surveyor or solicitor to obtain a Highways plan. This will show the extent of the public adopted highway adjoining your land. Compare this to your land registry plan. Identify any unregistered strips or gaps. If they are not in locations which are likely to pose a problem they can be incorporated in a design, or designed around. If they are likely to be problematic they will need rectification or title registration put it in hand in good time. Actively maintain any strips, mowing, cutting hedges, repair gateways, keeping photographic evidence and a written record of the date, your activities as owner and the people involved. Your claim may not be successful initially however by continuing to exercise your rights as owner you will build up the chain of demonstrable years as owner. 12 years passes quickly!
Whether contemplating selling, a promotion agreement, option agreement or conditional sale contract, have a look at your title in good time and seek legal advice to flush out any boundary or title issues at an early stage. Our highly-experienced team would be happy to help you.
The content of this article is for general information only. It is not, and should not be taken as, legal advice. If you require any further information in relation to this article please contact the author in the first instance. Law covered as at March 2020.