Possessory title and unregistered property: selling or buying one in England and Wales

HM Land Registry's practice guide says a possessory title can be given where the applicant is in actual possession of the land, or receiving the rents and profits, and no better class fits. It adds that an owner with limited or no documentary title may still be registered with a possessory title.

The practical difference is in the law. Under section 11(7) of the Land Registration Act 2002, a possessory title has the same effect as an absolute title, except that it does not affect enforcement of any estate, right or interest that is adverse to the owner's title and subsisted at the time of registration. In plain terms: someone with an older claim to the land is not shut out by the registration. That is why buyers and lenders look at these titles more closely.

Common reasons for a possessory title include:

• Lost or destroyed deeds. The practice guide says that where the original deeds cannot be explained, the Registry may not be able to give an absolute title, although the title may still be acceptable to purchasers and mortgagees.
• A claim based on long occupation. For unregistered land claimed through adverse possession, the Registry's separate guide says it will register an absolute title only where it knows the owner's title and the owner has consented or could have no valid grounds to object. In any other case it will register only a possessory title, and not even that where there is real doubt.

Nothing stops you selling. What changes is how much explaining the sale needs. Before you list:

1. Find out why the title is possessory. The register entry and the old file should say. A conveyancer can often tell you quickly.
2. Gather the evidence. Statements about how long you have lived there, copies of old deeds, and anything explaining lost documents all help your buyer's conveyancer.
3. Tell your own conveyancer at the start, not after you have an offer. It affects the questions the buyer's side will ask.
4. Expect the lender to be involved. Lenders set their own rules, which conveyancers read in the UK Finance Lenders' Handbook. Some may lend on a possessory title in some circumstances and may ask for extra protection such as title indemnity insurance. We do not quote prices, because they depend on the insurer and the facts.
5. Ask whether an upgrade is available. See the next section.

Buyers who need a mortgage have the most to check. If your buyer's lender refuses, the sale can fail late. Our page on selling a property that is hard to mortgage explains the other routes.

Registration becomes compulsory when the property is sold. The practice guide says the buyer must apply within two months of completion. If the deadline is missed, the transfer becomes void as regards the legal estate, which reverts to the seller to hold for the buyer, although the Registry can extend the period for good reason.

In practice this means your buyer's conveyancer will examine the deeds, check a chain of ownership, and then register the property for the first time. You can speed things up by having the deeds ready, and you may be asked for a statutory declaration or other evidence about gaps.

You can also register voluntarily before selling. The practice guide says this can be particularly useful where a buyer or lender may doubt the title. The Registry's fees guide treats first registrations based on lost deeds or adverse possession as voluntary applications unless a deed triggers compulsory registration, and gives voluntary applications a reduction of at least 25% on the usual fee. Where deeds are said to be lost, the guide says the Registry takes special precautions, looking at the applicant's identity, who held the deeds, the evidence of loss and any other evidence.

We cannot say how much a possessory title or unregistered status affects a sale price, because we have found no reliable official figure. It depends on the evidence, the property and the buyer's lender. Speak to a conveyancing solicitor.