Improper title split?

Hi, I purchased a house and was told the adjoined garage was sold separately to a cash buyer prior to the sale of the house.

This would be 'fine' if there was consent from the charge holder/mortgage lender at the time. However, it now transpires that the title, that included the garage, was mortgaged. So selling the garage before the house was sold and transferred, was not legally allowed right?

- There was no consent for the sale of the garage from the charge holder and there was a restriction in the title register that there would be no disposition of the registered estate by the proprietor.

- There was also no local planning permission granted by the local council to split the garage from the house.

The application to HMLR for the garage was rejected. The house has now gone forward and was given a new title number and new title plan illustrating just the house and its garden with the garage removed.

The garage will now be re-applied for but it's unlocked/ has deed of release from the charge holder, by sale of the house that happened afterwards. I believe the garage buyers and house sellers solicitors intentionally withheld and delayed documents to have the garage application fail and to now be able to re-apply given that there is the deed of release from the house sale.

Please advise me on this as I feel scammed that the purchase of the house may have given the deed of release that may now enable the registering of the garage that we were told was already sold off before the house purchase. Have we been mislead that the property was sellable with the garage sold off in this way?

I have lodged an objection based on this, the planning permission matter as well as the fact that the property is connected to a rentchief on the land and if the garage and house are to be registered as separate titles, would need to be proportioned and may have even needed permission from the rent chief land owner in the first place.

During the purchase, both my solicitor and estate agent said that if there was an issue with the completion and registering of the garage, it will be kept in the title and the garage buyer and their solicitors would need to deal with the seller separately from anything to do with me and the house.

Now that the house title has been formalised without the garage, and the fact that the garage has disappeared from the land registry search too, I do wonder how it will be possible to retain the garage in the title as was advised as well as how this objection now effects the garage buyer - Can they be refunded and compensated by the seller or their solicitors/conveyancers?

Hi Abdul - if a property + garage was subject to a mortgage the lender's security would have to be discharged to enable for example the garage to be sold/bought and registered free from their security/legal charge.
What's legal would be a Q for a legal adviser to answer for you
There is no direct link between planning authority and registration of a sale/purchase
I can't really see how you have been misled if you agreed to buy the property less the garage. Whilst the order of events is not as you anticipated the outcome is the same. But again a Q for your legal adviser along with the compensation/refund issue also



 

Hi Adam, 

Thanks for your prompt response,

To clarify - At the time of the garage sale, there was no discharge, just the cash payment between the garage buyer and  seller. 

The house was subsequently purchased that enabled the discharge that will be now used to register the house, and the garage. Is this not fraudulent to sell/receive cash for property not owned? I appreciate that is a legal question though.

Thanks for confirming about the planning authority and registration process - Seems like an unenforceable loophole. 

I feel mislead that the property was not actually owned outright which would have allowed for the garage sale and title split to have been done before the house purchase. The house was from probate to executors of the estate. It seemed as if the probate and life insurance had paid off the mortgage and we were influenced to help the sale as it was initially made out to be to help with grieving so the seller could move on etc. I understood the garage was not included but did not know that its release was dependant on the house sale. During the time, and I am sure is still true now, once the ball was rolling, everything gathered momentum to snowball forward. 

How about the rentchief land owner angle?

Also, what about restrictive convenants over the use of the garage - interpretation can be that of serving only the occupants of the private dwelling house physically adjoining the garage and house (sharing the same single wall) and not to be used by 3rd parties to the dwelling for commercial activity such as that linked to the motor trade, which is the garage buyer's intention to store and sell vehicles. Though again, I appreciate this is not a registry matter though do wonder how can registry be allowed if facilitating a breach of this?     

As for refund and compensation, that was more in sympathy for the garage buyer in case they have be defrauded from a voidable contract where the sale was misrepresented due to the garage not being owned or transferred out or split before the house sale.

Thanks in advance
 

Hi Abdul - thanks for the clarification re the discharge although that changes nothing from a registration perspective as the property was discharged and sold it seems. Any discharge re the garage could come later.
There's no loophole as planning are concerned with very specific matters such as materials used, size and shape of building etc whereas we are concerned with the legal ownership of the land only. What's built or not on the land does not alter that ownership.
The remaining points you make are not for us to explain or answer and very much ones for your legal advice. We register the legal ownership and changes that may occur. We also register restrictive covenants and provide that information. But we have no role to play in their enforcement for example. 
Please do seek legal advice 

Thank you for your reply Adam - Apologies for my delayed response from shock and disbelief as well as illness.

This seems like LR turning a blind eye to evidence of fraud within their own records to just move forward with the current backlog. 

To clarify: 

The garage application was lodged before the house and was rejected by LR - Possibly due to no ID information provided or no available deed of release documentation, as the connected house had not been sold to provide this yet. 

This evidences a fraudulent sale of land when it was not owned outright and the seller was not entitled to sell. The TP1 application date for the garage sale before the application date for the house sale, would clearly evidence this.

This could also implicate a fraudulent practice of intentionally omitting documentation such as ID and the deed of release to delay the process so that when the deed of release comes after house sale, it could be used to then re-apply to the rejected application. This is unfair to the mortgage lender at the time as well as to the new charge holder who has been usurped by the process. Further, this would be a systemic flaw within the LR record keeping as it would be facilitating this to happen.   

If the date of the garage sale differs in the new TP1 re-application and is stated as being after the house sale, then this further evidences fraudulent practice of amending information to suit and progress the application - Even though LR will have the evidence from the previous rejected application and should contact the mortgage lenders of this activity. If not utilised by LR, it would be convenient for the seller, armed with the possibly previously missing ID form and deed of release discharge, obtained from the house sale, to re-submit the TP1 application and satisfy LR's initial rejection factors.

I appreciate the registry service is just that, but blindly registering if there is evidence for fraud, and within the records,  surely cannot be right and allowed?  

As for the local borough of Richmond requiring planning permission for title splits - I meant as in the loop hole being that neither local council nor Land Registry can do anything about such title splits in such circumstances. LR can register a title split without there being any permission to allow such a split from local council and the local council can do nothing about it.

If LR do or have made a mistake, at least there is 6 years to deal with it in court. My worry is that by then, the house and garage seller may change their name or leave the country leaving no course of action for follow up while this sham was facilitated by a LR systemic failure in ironically accepting an illegal and fraudulent sale of land while evidence was present within their own records. Maybe that is another loophole LR should consider remedying too.

I am awaiting progress with my objection but look forward to input here if there's anything more to share about the LR processes in this matter other than it being a black and white registering and ownership process when clearly there is a grey area for consideration and action. 

Abdul - if you have an ongoing issue/objection with us at HMLR then this public forum is not the place for us to then air and share any specific views. I would recommend sticking with the specific contact channel you have used to raise your objection and concerns re the planning/registration process and the grey area as you see it.
If you believe there has been property fraud then you can report that at this email contact address if you have not already done so
reportafraud@landregistry.gov.uk