Purchase of a country house with title issues

Welcome to The Brief. This month we look at some title issues that arose on the acquisition of a beautiful country house that we recently exchanged on.

The Brief

One of our long-standing clients contacted us with excellent news: they had finally found their dream country home in Somerset. The property includes a substantial country house and comes with around 80 acres of land, including pasture, three further cottages and various farm buildings. In the face of strong competition, a 10 working day timetable to exchange had been agreed.

Executing the Brief

Acting on a country house acquisition is something which, as a firm, we are particularly well placed to do. Our property team covers all aspects of rural and residential property, planning and construction law. 

Site visit

Where we can, we try to visit the properties our clients intend to purchase. A site visit is particularly important when the property is large or complicated; practical insight can be immeasurably helpful to our due diligence. In this case, we were able to attend two working days following our instruction. We visited the property at the same time as the appointed building surveyor and with the sales agent and the buying agent.

Title issues

During the site visit, the surveyor walked the boundaries of the property and identified a couple of locations where the physical boundary lies outside the title boundary. Once back in the office, we discussed this with the seller’s solicitors who confirmed the physical boundaries have not been moved for the last 20 years. It was agreed the seller would provide a statutory declaration to confirm possession and control of the additional land enabling us to apply for adverse possession of these strips of land after completion.

Additionally, it transpired that two of the cottages (erected five years ago) were erected on a part of the property which is affected by a restrictive covenant prohibiting the development of the land. Further research confirmed that the covenant benefits two neighbouring properties. Planning consent was obtained for the cottages and the local planning authority should have served notice of the proposal on the relevant neighbours, so we expect the neighbours were fully aware of the development. The seller confirmed that no objections were raised, so a future claim for breach of the covenant seems quite unlikely. However, since a claim remains possible, the seller agreed to cover the cost of indemnity insurance. This indemnity insurance requires payment of a one-off premium and will exist in perpetuity. It will cover our client’s costs in defending any future claims and any diminution in the value of the property which results from any enforcement. 

The debrief

Having resolved the two title issues and with the knowledge gained from our site visit, we were able to complete the remainder of the due diligence quickly. We produced a comprehensive report for our client who remained delighted with the property and happy with the results of all our investigations and, particularly, our solutions to both the title issues and a couple of other issues we identified.

We exchanged on the 9th working day and have a completion date set for early June. Our client is looking forward to a happy summer in their new home.

Please refer to our Country House brochure and our article examining the intricacies of indemnity insurance for further reading.

This publication is a general summary of the law. It should not replace legal advice tailored to your specific circumstances.

© Farrer & Co LLP, April 2024