Possessory title effectively indicates that there are not enough legal papers to establish absolute title. Therefore, it is conceivable for someone to contest ownership.
This is the reason you risk losing the possession title if:
- Adverse possession was used to acquire the possessory titled land
- A different person can offer convincing evidence of their ownership of the contested property (also called the Epitome of Title)
- There is evidence of fraud or improper handling at the time Possessory Title was granted
- The original deed contains omitted covenants or rights of other parties. It is hard to predict what kinds of limitations could one day be enforced because there would be no unregistered deeds accessible
- The opposing party may be able to persuade land registry authority that they have a superior title regarding legal standing
You will not be able to make a claim for losses as the inferior titleholder if any of such circumstances occur. This is true even if you made a substantial financial investment in the property.
For instance, you would not be paid for any charges if you constructed a building or structure on the property.
Value of real estate under possession
The property’s value will almost probably be diminished due to the ensuing issues that are associated with this form of title. The crux of the issue is resale. While some buyers might be assured that they can contest the title’s status, this might not be the case always.
Most people will thus seek a discount to offset the risk. After all, there’s a possibility that the status and ownership of the land may be totally lost (without any compensation).
To determine the severity of the problem, however, the majority of purchasers will seek conveyancing-related counsel. Therefore, if you’re selling, be careful to have your own legal counsel so you can verify the information. After that, you might perhaps bargain to a suitable level while considering the danger to the customer.
Offering real estate with possession title
Selling a property whose foundation land possesses Possessory Title is perfectly doable, but the procedure won’t be simple due to the inevitable legal issues that will arise.
Possession title properties are sometimes enticing to purchasers since, on the surface, they are less expensive than someone with absolute title.
Purchasing real estate with possession title
Before making a deal for a home of this type, buyers of land and property should be aware of a number of possible dangers such as –
The title of the property should be disclosed to the mortgage lender. You’ll need to confirm that they agree to lending money in certain conditions. Ask the vendor for a Statutory Declaration of Ownership including details of their ownership. Ensure that nothing you want to do to the property or on it will likely violate the conditions of the lost title deed. Lastly, obtain Indemnity Insurance Possessory Title to ensure that you are protected in case of future difficulties.
