Voluntary first registration: what you need to know

Title deeds

Ownership of property is evidenced by documents known as title deeds. The documents often include conveyances, transfers, assents, deeds of gift, mortgage deeds, leases, plans etc. Collectively, title deeds show the chain of ownership as well as any rights granted for the benefit of the property or rights reserved by the property for the benefit of neighbouring property. The deeds will also show how multiple owners hold a property, whether as "joint tenants" or "tenants in common" i.e. whether all parties on the deeds own 100% of the property and upon one or more of their death the property will automatically pass to the surviving owners through the "right of survivorship" or whether they each own a specified share in the property that can form part of their estate and be left to beneficiaries.

First registration: compulsory vs voluntary

The Land Registry was established in 1862 following the Land Registration Act 1862 with the purpose of recording property ownership, but this was only on a voluntary basis i.e. an owner would choose whether they wanted to register their documents or not even after a transfer/sale etc. The Land Registration Act 1925 established the power for the government to issue Orders in Council to gradually roll out compulsory registration on a phased, geographical basis.

Compulsory registration was then eventually rolled out nationwide (for England and Wales) in 1990. This means that whenever there are "dealings" with land such as mortgaging or remortgaging, entering into a lease with a term of more than 7 years, transferring ownership in any way etc, this must be registered at the Land Registry using their central register. All registered land and property is then allocated a number known as a title number, which creates a digital record known as a title register.

However, due to long-standing landowners, land owned by the Church, the Crown and local authorities the Land Registry estimates that approximately 12% to 15% of land in England and Wales remains unregistered. The Land Registry has stated that it aims to achieve "comprehensive registration" of all freehold land and property in England and Wales by 2030 but unless property owners decide to voluntarily register their title deeds, this may be an unreachable goal.

The benefits of registration

1. Protection from fraud (as you can add an anti-fraud restriction to your title and set up alerts).
2. Reduced risk of adverse possession (it helps to protect land being claimed by others through "squatters" rights).
3. Simpler future transactions (registered properties are generally faster/easier to sell or remortgage)
4. Reduces delays (in trying to locate the paper deeds when selling or remortgaging).

In addition to the above benefits, the Land Registry also offers an incentive by applying a 25% discount on the fees they charge for registering title deeds.

The risks of having unregistered deeds

1. Fire or smoke damage
2. Water damage from leaks and flooding
3. Becoming lost when moving house or organising paperwork
4. Being stolen

If any of the above occurs and your unregistered deeds are damaged beyond recognition or destroyed, you may struggle to get "absolute title" (which is the highest class of title in property ownership) when you need to register your property on a compulsory basis. If you do not have copies of these documents, you are likely to get "possessory title" which means you have only been able to prove factual possession of the property. This can be upgraded after several years but can cause issues with potential purchasers and mortgage lenders.

The application process

When we are instructed to deal with a voluntary first registration, we will obtain the hard copy original documents before examining and deducing title. In doing so we will establish the links in the transfer of ownership ensuring there are no gaps in the documentation and that nothing needs searching for or reconstituting before preparing the application. The application forms will then be filled in, signed off and posted to the Land Registry with the original title deeds. As the application is on a voluntary basis it can take up to 2 years for the Land Registry to start processing it, but if you have a change of circumstances in that timeframe that means you need the registration to be completed quickly, we can ask them to expedite this.  When processing begins, the lodging conveyancer will also deal with any further queries raised by the case worker reviewing the documentation. Once all queries have been responded to satisfactorily, the Land Registry will send us an electronic register of title that shows you as the registered proprietor and lists any rights, reservations, covenants and charges relating to the property.

Conclusion

In summary, given the risks associated with having paper records, we would always recommend having your title deeds registered at the Land Registry to better protect your interest in property you own and may wish to leave to loved ones in your will. If you own property that is currently unregistered and wish to discuss this further, please contact one of the residential conveyancing team, who can discuss your options with you, the costs involved and use their expertise to offer support and guidance throughout the process.

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If you require further advice regarding this, or any other legal issue, please contact Chattertons.

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