In some circumstances a Developer or Housing Association might want to sell a plot where it is not yet the registered owner of the property, but is it possible? The good news is the answer is yes.
Legally it is possible that a sale can proceed where the registration of your purchase of the land is pending at the Land Registry. This is applicable whether the land purchased is unregistered or registered with the Land Registry.
In order to do so, we would expect a buyer to request that:
- the sale contract is drafted to take account of the application pending with the Land Registry; and
- sufficient proof is provided that the seller is entitled to be the registered as the owner of the property.
In terms of the requirements of mortgage lenders the purchaser’s solicitor is required to report the fact that the seller is not yet the owner of the property. However, there is nothing within the Council of Mortgage Lenders Handbook which rules out proceeding with a purchase where the seller is not yet registered as the owner of the property (particularly if points 1 and 2 have been satisfied).
Many Developers and Housing Associations perceive that until they are registered as the owner of the property they are prevented from entering into contracts for sale. This can cause unnecessary delay in the disposal of the plots which can have a significant financial impact on the Developer/ Housing Association.
Our commercial property team advise Developers and Housing Associations on how to dispose of properties whilst the registration is pending. If you would like advice on how to avoid unnecessary delays on your sites or further information please contact Keith Wright at Stephens Scown on 01872 265100 or email at property.truro@stephens-scown.co.uk.