What should you do if you inherit a property with no title deeds?
Inheriting a property without title deeds will mean you can’t prove you’re the legal owner – and it may be more common than you think. Here’s what to do if this happens to you.
Losing the title deeds for an inherited home is a headache – and while tracking them down can be easy, it's not always so straightforward.
Title deeds are documents confirming who the legal owner of a property or piece of land is and trace the history of ownership over time.
Deeds also usually include whether the property has a mortgage on it, how much it was last sold for and details of any ‘restrictive covenants’ – promises not to do certain things with the land, like not building on a certain area.
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But around 10% of properties in England and Wales aren’t registered with Land Registry, making tracking down title deeds a lot trickier.
Historically, title deeds, also known as a title register, were a collection of physical papers, but Land Registry started phasing in digitally-formatted ones from the early 1990s.
Because title deeds say who the legal owner of a property is, they are essential if you inherit one, particularly if you want to sell it – no buyer’s solicitor is likely to let their client buy a home if it can’t be proved who owns it by law.
Paula Higgins, chief executive officer of property advice website HomeOwners Alliance, said: “Title deeds can be particularly important when inheriting a property that you intend to sell, as the executors or administrators will need to establish that the deceased was the legal owner before the property can be transferred or sold.”
How to locate title deeds on an inherited property
Before doing anything, you need to find out if the inherited property is registered with HM Land Registry. This is the process that applies to properties in England and Wales.
More than 90% of land in these two countries is registered, according to the Land Registry, so it is more than likely an inherited property will be on its database.
You can find out whether a property is registered via gov.uk.
If the property is registered
If the inherited property is on the Land Registry’s database, you can typically source a digital copy of the title deeds for a small fee.
David Fenwick, lead probate solicitor at Co-op Legal Services, said: “Where a property is registered, the original paper deeds are no longer needed to prove ownership. Official copies of the title register…can be obtained from HM Land Registry and are accepted in place of the historic deeds.”
If the property isn't registered
If the property isn’t registered with Land Registry, this is where the process can get trickier. As a first port of call, contact the solicitor involved in the initial sale of the deceased’s house or the mortgage company – either of these might have the original paper deeds.
The deeds may also be in a safe deposit facility with the deceased person’s bank or with other family members who have helped with their affairs.
If, after this, you still can’t find your title deeds, you’ll need to get legal help from a conveyancing solicitor.
They will be able to apply to HM Land Registry for what’s called a “first registration” which will ensure the property is registered and on its database.
They’ll gather a host of documents that can prove to the Land Registry that the property you’ve inherited belonged to the deceased.
Fenwick said: “This might include historic conveyancing documents, mortgage records, council tax bills, copies of documents held by previous solicitors, or statutory declarations from individuals with knowledge of the property's ownership history.”
Do note, HM Land Registry says it can take up to 12 months to process a first registration application.
You can apply for a first registration yourself, but it can be legally complicated, so it’s worth getting a conveyancing solicitor in to help, although they will charge you for their services.
In any case, Land Registry will charge you up to £1,105 to apply for first registration and fill in the relevant form, which could be a TR1, TP1, AS1 or other form.
How to sell an inherited property
If the property is registered with the Land Registry and the deceased person was the only person who owned the home, you will need a Grant of Probate or Letters of Administration to sell it.
You will need a Grant of Probate if the deceased person left a valid will naming you as an executor and Letters of Administration if there is no will or it is invalid.
Grants of Probate or Letters of Administration are usually issued within 12 weeks of applying but can take slightly longer depending on the complexity of the application, according to the Courts and Tribunal Service.
If the title deeds have been lost, you’ll need to first go through the first application process to ensure the property is registered with HM Land Registry.
Once probate or administration has been granted, you need to arrange a valuation of the property with an estate agent to gauge its market value before putting it up for sale.
The process of selling an inherited property is similar to selling a regular one, except there are tax implications to consider.
If the value of the property has increased since the person who owned it died, you may owe capital gains tax, if the gain is over your annual exempt amount of £3,000. You can deduct estate agent or legal fees to reduce how much any profit is taxed at.
You may also owe inheritance tax of 40% if the value of the deceased person’s home combined with the rest of their estate breaches the nil-rate bands.
