When purchasing a new build property buyers expect a smooth transaction. However, title issues can sometimes cause significant delays and complications. Understanding these issues and taking proactive measures to address them can save both developers and buyers considerable time, money, and stress. In this blog, we’ll explore the common title issues that arise in new build plot sales and the proactive solutions that can be put in place to avoid or resolve them.

1. Unclear or Missing Title Documentation

One of the most common issues that arise during the sale of new build plots is unclear or missing title documentation. This can cause concern and result in enquiries being raised by the buyer that need to be addressed.

Solution: Comprehensive Title Review and Early Investigation

Before entering into any  agreement for the purchase of land, developers should ensure that they have received a full and detailed title review from their appointed solicitor or conveyancer. If any issues are found, they can be resolved early in the process, ensuring that the plots can be sold and the sales can proceed smoothly. The solution to missing title documentation may be procuring a suitable indemnity insurance policy protecting both the developer and their future plot buyers.

2. Restrictive Covenants

Restrictive covenants are conditions placed on the land that restrict certain types of use or development. For new builds developments, these covenants could cause considerable frustration and cost if discovered too late.

Solution: Thorough Legal Review and Early Clarification

A comprehensive legal review should be undertaken of the title to carefully examine any covenants or restrictions that are attached to the land. It's important to verify that these covenants do not interfere with the planned development or intended use of the property. If restrictive covenants are found, negotiations should take place with the parties who imposed them to seek a release or modification of these covenants where necessary. In the event of unknown third parties benefitting from the covenants, indemnity insurance may again provide a suitable alternative solution.

3. Easements and Rights of Way

Easements, such as rights of way or access to neighbouring properties, can complicate a new development. While easements are sometimes necessary and unavoidable, they can present problems in the context of new build developments if not clearly identified. They can impact a buyer's use of the land and limit the design or layout of the property.

Solution: Clear Identification and Negotiation

Easements should be identified as part of the title review process. If any easements or rights of way exist, the developer must examine how it will affect the development and if any easement needs to be extinguished. Where easements cannot be extinguished a developer may need to incorporate the route of the easement into the layout of the development and as such early identification of a problem easement is essential.

4. Boundary Disputes

Boundary issues are a common issue. Unidentified or unclear boundaries of the whole development or the plots to be sold can cause confusion and even lead to costly rectification.

Solution: Accurate Boundary Surveys

One of the best ways to avoid boundary disputes is to produce development plans early and apply for Land Registry Estate Boundary or Land Registry Estate Layout approval without delay. This ensures that the boundaries are clearly known and that the plot plans are correct and only contain land within the developers title.

5. Charges or Liabilities

Sometimes, the title of the land may have financial charges or liabilities associated with it that are protected by taking a charge over the developers title. These charges can complicate or even prevent the sale of a new build plot.

Solution: Clear Financial Due Diligence

The key is in the detail for Developers and knowledge of the requirements for compliance with outstanding charges or liabilities on the title ensures delays are mitigated. This includes checking for any charges or liabilities that may affect the saleability of plots. Working with a solicitor will help ensure that the procedure for dealing with these charges is established early and in advance of plots being sold.

Navigating title issues during the sale of new build plots can be complex, but being proactive and thoroughly addressing these common challenges will help ensure smooth transactions and happy buyers. By conducting detailed title reviews, reviewing restrictive covenants, identifying easements, resolving boundary disputes, and addressing financial encumbrances, developers can avoid delays and legal complications. Working closely with legal professionals is the best strategy to ensure a trouble-free process from start to finish.