What is Possessory Title?
Possessory title is where the legal ownership of the land/freehold, but this ownership is open to dispute due to incomplete proof of ownership. For example, the original deeds or the purchase documents are missing.
This issue has mostly been resolved since compulsory registration at the Land Registry was introduced in 1990.
Possessory title is one of seven types of title to land, of which the most common is absolute title, which is 'proof against the world' and means no-one can dispute your ownership; possessory titles are typically harder to sell and worth less than an equivalent absolute title.
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What's the difference between a possessory title and an absolute title?
There are two key differences between a possessory title and a title absolute:
- A possessory title can be set aside if someone else applies to the Land Registry with the necessary deeds to prove their ownership of the property.
- A possessory title is subject to any covenants or rights affecting the property – without the old unregistered deeds there is no way of knowing what these may be but these could include matters which would restrict the use of the property or prevent building on the land.
Because of this, a possessory title is not a "good and marketable" title, and this is likely to affect the value of the property. You can, however, insure against these risks by taking out a legal indemnity policy, and a buyer or lender will often accept this.
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How does a possessory title come about?
Either the original documents are missing, or someone has claimed the property through adverse possession. For example:
- The title deeds were destroyed by fire or other disaster or stolen;
- The title deeds are currently registered under the wrong name;
- A family have passed the house down through generations, and the original title deeds and purchase documents are lost;
- A previous sale/purchase was fraudulent, and there are no title documents;
- Someone has occupied the property, meeting the conditions of 'squatters rights';
- Someone bought the property without the help of a conveyancer, and there is no electronic proof of ownership.
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How can you claim a possessory title on a property?
To acquire possessory title via adverse possession or 'squatters rights', without any proof that you're the landowner of the property in question, you must have:
- exclusively occupied the property for 12 years (10 if the land is registered);
- paid no rent nor sought or received permission to occupy the land;
- received no objections to your occupation of the property; and
- demonstrated a clear intent to own and protect the land (usually through maintenance of the property and/or establishing a boundary fence).
What evidence do you need?
You need to produce a statutory declaration setting out such facts as:
- when the occupation commenced;
- the purposes for which the land has been used, confirming that no consent for the use was obtained;
- that the use is and always has been open and apparent;
- that no objection has been raised; and
- that the use has been continuous.
A statutory declaration must be sworn in the presence of a solicitor, licensed conveyancer, or commissioner for oaths. The making of a false declaration is a criminal offence.
Continuous possession
You can leave temporarily, but if, for example, you were seeking to claim possessory title to the house and at some point left to live elsewhere permanently, then moved back in, the 12-year period would begin from the date you moved back in.
Clear, open, and apparent
If you were hiding your occupation of the property in a way that would not have been clear to the proprietor that someone else was living there, this could put a stop to your claim. Visible maintenance and building fences around the perimeter are strong ways to make your occupation clear and apparent.
What Land Registry forms must you complete?
You must make the application on form FR1: rule 23 of the Land Registration Rules 2003. Please note the need to attach to form FR1 a plan showing the land if the verbal description in panel 2 of form FR1 is not sufficient to identify the location and extent of the land on the Ordnance Survey map. You must fill in panel 12 or your form will be returned to you.
With form FR1, you need to send in form DL in duplicate listing the supporting documentary evidence: rule 24 of the Land Registration Rules 2003. You also need to send the appropriate fee under the Fee Order and the inspection fee. If you are providing a statement of truth, you should also complete form ST1.
What happens after you've made an application?
Once you've applied to the Land Registry, it sends a notice to the registered or last known owner of the land, who has 65 business days to object. A simple objection is enough to deny your claim. The landowner can give a counter-notice which requires you to show that your situation falls into one of 3 categories:
- 1That it would in some way be morally wrong for the owner to defeat the application, for example, where the owner allowed or encouraged the squatter to believe that they actually owned the land;
- 2That the squatter is for some other reason entitled to become the new owner of the land, for example, where they contracted to buy the land from the owner and paid the purchase price but the land was never transferred to them;
- 3That the land is next to land already owned by the squatter, the exact line of the boundary between the two pieces of land has never been formally determined and the squatter mistakenly but reasonably believed that they were already the owner of it.
If the Land Registry doesn't receive an objection or if the owner's objection fails for any reason, you'll be registered as the new owner of the land.
What if your application for adverse possession fails?
If your application fails because the owner serves a counter-notice and you do not fall into one of the three categories above, you can apply to the Land Registry again later, providing you remain on the land for a further two years.
It is much more likely that you will succeed with your application the second time if the owner has failed to evict you from the land.
Lost Deeds
If you are the legal owner of the land but you've lost the title deeds for whatever reason, then you need to swear a statutory declaration detailing when you acquired the property, under which circumstances, and how the deeds were lost.
The declaration also needs to confirm that should the deeds be located they will be submitted to the Land Registry. Any available supporting evidence should be produced, such as photocopies of deeds, sworn statements from neighbours who can confirm how long you've occupied the property, statements from any mortgagee who has a debt secured against the property, and a statement of truth from any conveyancer who acted in the conveyance in the property transaction.
What Land Registry forms must you complete?
You must make the application on form AP1: rule 13 of the Land Registration Rules 2003. You must also send the appropriate fee under the current Land Registration Fee Order. The Land Registry will return as defective any application made in respect of land that was not already registered on 13 October 2003, and anywhere there is no evidence of at least 12 years’ adverse possession by that date. If you are making a statutory declaration as evidence, you will once again need to fill in form ST1.
Please note that the 12-year period of continuous occupation does not have to be by the same person. If a person is buying a registered property where the seller has no title to part of the garden and they have owned the property for, say, 6 years and so cannot make a claim, they can provide the buyer with a statutory declaration covering the period of ownership.
Once the buyer has lived there for 6 years, they can make their own declaration covering the period of ownership and based on the two declarations together can make a claim. Alternatively, if they sell the property within 6 years, they can make a declaration to pass on to the buyer together with the original declaration, and so on.
How much does the Land Registry charge for a possessory title application and claim?
A first registration of possessory title over as yet unregistered property (due to missing documents) will be subject to scale one postal fees:
Land Registry Scale ONE Fees
| Value of Property (£) | Fee - Electronic | Fee - Postal (New Builds or First Registration) |
| 0 - £80,000 | £20 | £45 |
| £80,001 - £100,000 | £40 | £95 |
| £100,001 - £200,000 | £100 | £230 |
| £200,001 - £500,000 | £150 | £330 |
| £500,001 - £1,000,000 | £295 | £655 |
| £1,000,001 and over | £500 | £1,105 |
A transfer of a registered estate (due to adverse possession) will be subject to scale two fees:
Land Registry Scale TWO Fees
| Value of Property (£) | Fee - Electronic | Fee - Postal (New Builds or First Registration) |
| 0 - £80,000 | £20 | £45 |
| £80,001 - £100,000 | £20 | £45 |
| £100,001 - £200,000 | £30 | £70 |
| £200,001 - £500,000 | £45 | £100 |
| £500,001 - £1,000,000 | £65 | £145 |
| £1,000,001 and over | £140 | £305 |
Upgrading a title from possessory freehold to absolute freehold costs just £20 per title using the online portal, or £40 by post or in person.
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Can a possessory title be disputed?
Yes. You risk losing the possessory title if:
- The title was obtained by adverse possession;
- Someone else can produce clear proof of ownership (Epitome of Title) or convince HM Land Registry than their claim to the title is stronger than yours;
- There's proof that the application for possessory title was fraudulent or processed incorrectly;
- There are forgotten covenants or third-party rights in the lost deeds, which will still be enforceable against you.
If you've invested in your title, for example, if you've extended or constructed outbuildings, you cannot claim any compensation.
This is why lenders and buyers would expect you to have taken out indemnity insurance to ensure that if someone comes forward, you/they will at least be fully compensated.
You should upgrade a possessory freehold to absolute freehold, or a possessory leasehold to an absolute leasehold as soon as your circumstances allow.
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How does possessory title affect the property value?
The value of a possessory title will inevitably be less than a title absolute; sellers will always argue it doesn’t affect the buyer if they can get a mortgage. The challenge is that there is a risk that someone will come along with a better title than the buyer, and then they are forced into transferring to them without compensation.
While there are indemnity policies that can be taken out to protect against this, the uncertainty can make the whole prospect seem less attractive. That's why you can often find possessory titles sold at auction - they are harder to sell on the open market.
There is always a risk that the title and property could be lost (with no compensation unless covered by indemnity insurance). Whether buying or selling, choose an experienced possessory title conveyancing solicitor, who can advise on the specific risks under your unique circumstances and help you negotiate a fair price.
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Can you get a mortgage on a possessory title?
Possessory title sales are more likely to attract cash buyers. You can sometimes get a mortgage on a possessory title, depending on why the title has been given this class.
The Council of Mortgage Lenders states that where a title is based on adverse possession, a Possessory Title will be acceptable if the seller is registered as the registered proprietor of the title, or if on completion, the borrower will be.
However, there is a risk that the true owner could come forward with a better claim for possession, with deeds to prove they are the true owner. This could leave you with no title to the property you've paid for and no compensation for your loss, even if you had, for instance, built a house on the land. For this reason, your lender will usually insist on indemnity insurance.
In the case of lost title deeds, a statutory declaration – i.e. a 'sworn statement' - from the seller must explain the loss satisfactorily before the lender will lend.
Work with an experienced mortgage broker who can advise you on your mortgage options and present a selection of viable choices.
Possessory Title only with Indemnity Policy
In most cases when buying a Possessory Title, indemnity insurance is put in place to protect against possible loss arising from claims on your property. It will cover the loss of market value if you're forced to surrender the title, including compliance with any court demands or injunctions.
Your conveyancing solicitor will arrange the cover to begin between exchange and completion. The premium is a one-off payment with no expiry. The cost will vary based on the size and location of the property, and will likely be higher if there are commercial elements.
You must take out an indemnity insurance policy to protect you and your mortgagee; however, this insurance will not be valid if there is already an ownership battle, if there's an alternate claim on the property, or if you make contact with any individual who may have a claim or interest in the property. If indemnity insurance is not an option, we advise that you pull out of the purchase before the exchange.
If a lender decides to consider granting you a mortgage on such a title, they will also want to carry out a possessory title valuation.
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Can you update the possessory title to an absolute title?
Under section 62(7) of the Land Registration Act 2002, only four groups of people are entitled to apply to have their class of title upgraded from a sub-standard class of title to a better one:
- The registered proprietor
- A person entitled to be registered as proprietor, to include a personal representative of a deceased proprietor and a purchaser of the land
- A proprietor of a registered charge over the land
- A person who is interested in a registered estate that derives from the registered estate to be upgraded
Once the land is registered, you can apply to upgrade the class of title at any time. For a successful application, you must satisfy the Land Registry that any defects in the title have been remedied and, therefore, the reasons for granting an inferior class of title no longer apply.
The only exception to the above rule is in the event of such a title after a lapse of time.
1 - Possessory Titles after lapse of time
Where title to an estate in land is a possessory one, whether freehold or leasehold, you can apply to upgrade the title to either an absolute freehold or a good leasehold title once the possessory title has been registered for 12 years (10 years if the land is registered. See section 62(4) and (5) of the Land Registration Act 2002).
The date on which the title was first registered is stated in the property register, taken as the date on which the first proprietor was registered.
Use panel 10(C) of form UT1 to tell the Land Registry who is in physical possession of the property. Where this is not the registered proprietor, you must be able to demonstrate the applicant’s relationship with the person who is in possession that, for the purposes of section 131 of the Land Registration Act 2002, means they are to be treated as being in possession. An example would be where a landlord is the registered proprietor, but their tenant occupies the property.
The new absolute title will, however, remain subject to any earlier rights or covenants, so an insurance policy is still required.
2 - Possessory Titles in other situations (and qualified titles)
You can apply at any time after registration to upgrade a possessory or qualified title in land, or a possessory or qualified rentcharge, by producing additional evidence of title to HM Land Registry that would remedy the reason why a possessory title or a qualified title was granted in the first place.
An example is where previously lost deeds have come to light.
Possessory title registered before January 1909: When an application is made to upgrade a possessory title that was originally registered before January 1909, a certified copy of the conveyance or assignment to the first registered proprietor should, if possible, be produced.
How much does upgrading your title cost?
It currently costs £40 per title or £20 if carried out online.
Are you buying a property with a possessory title?
Get our specialist help when buying a possessory title. We offer all our years of experience backed by a No-Sale, No-Fee, and Fixed Conveyancing Quote. Click to get an online quote or call us and speak to one of our team on 0333 344 3234 (local call charges apply)
Caragh is an excellent writer and copy editor of books, news articles and editorials. She has written extensively for SAM for a variety of conveyancing, survey, property law and mortgage-related articles.
