Introduction

The process of residential, commercial, and agricultural property conveyancing is often fraught with unexpected challenges. From uncovering restrictive covenants to dealing with disputes over boundaries or public footpaths, these issues can cause significant delays and stress for all parties involved. Each transaction is unique, bringing with it a range of complexities that must be carefully managed to ensure a smooth process. As experienced property lawyers, our role is to anticipate, identify, and resolve these obstacles efficiently. By doing so, we ensure that transactions proceed smoothly and protect the interests of our clients. This article explores some of the most common unforeseen issues encountered in conveyancing, their potential impacts, and the strategies employed to overcome them.

In this article, we look at the main issues in turn:

  1. Restrictive covenants: unknown covenants restricting use or development
  2. Environmental issues: contaminated land
  3. etc
  1. Restrictive covenants: unknown covenants restricting use or development

The problem

Restrictive covenants are legal obligations imposed on a property to limit or control its use, often discovered during a title review. These restrictions, sometimes decades or even centuries old, can prevent certain types of development, dictate building materials or boundaries, or prohibit commercial activity. For example, a covenant might prevent the construction of additional buildings on garden land, restrict land use to agricultural purposes only, or prohibit building within 50 feet of the front boundary line. These can often be overlooked by sellers but are critical for buyers to understand fully.

The impact

  • Delays occur as these covenants often require legal clarification or potential removal.
  • Prospective buyers might reconsider or renegotiate the purchase price if the covenant significantly limits their intended use.
  • Mortgage lenders may refuse lending on a property if they deem the restriction too severe, adversely affecting their security.
  • Property value might be significantly affected, making it difficult for the buyer to achieve their goals.

Resolution

  • Title review: Ensure a thorough review of the property’s title deeds to identify restrictive covenants early.
  • Indemnity insurance: Arrange indemnity insurance to protect the buyer and potential mortgage lender against enforcement of historic or ambiguous covenants. This is a common, swift solution.
  • Restriction removal: Obtain consent for removal from the original seller who created the restriction. Note that contacting the original seller voids the option of indemnity insurance.
  • Covenant modification or discharge: Apply to the Lands Tribunal for modification or discharge under Section 84 of the Law of Property Act 1925. This is typically a last resort and requires proving that the covenant is obsolete or unduly restrictive.

Time to resolve

  • Indemnity insurance can be arranged in a matter of days.
  • Obtaining the original seller’s consent may take several weeks, if consent is at all possible.
  • Modification or discharge through the Lands Tribunal may take several months, depending on the complexity of the case and objections from beneficiaries.

2. Environmental issues: contaminated land

    The problem

    In agricultural, residential, and commercial property transactions, environmental risks such as contamination from chemicals, waste, or historical industrial use are often flagged in environmental searches or site assessments. For instance, land previously used as a landfill or petrol station may pose significant health, safety, and financial risks. Sellers may not always be aware of these risks, leading to unforeseen challenges during the transaction.

    The impact

    • Transactions may be delayed due to the need for further investigations or remediation.
    • Buyers may renegotiate the purchase price to account for remediation costs.
    • There may be liability concerns under the Environmental Protection Act 1990, where the landowner can be held responsible for clean-up.
    • Future use of the land may be restricted, limiting its value and utility.

    Resolution

    • Indemnity insurance: Arrange indemnity insurance to protect against financial loss from remediation obligations for a set number of years.
    • Environmental assessments: Commission Phase 1 and Phase 2 environmental site assessments as needed. These assessments can identify and quantify contamination risks.
    • Remediation plans: Work with environmental consultants to address contamination through mitigation strategies.
    • Contractual protections: Negotiate warranties, indemnities, or retention of part of the purchase price pending remediation.
    • Liaising with local authorities: Engage with local planning and environmental bodies to address concerns proactively, although, this will void any option of obtaining indemnity insurance.

    Time to resolve

    • Indemnity insurance can be arranged in days.
    • Environmental assessments take several weeks.
    • Remediation may require months to over a year, depending on the extent of the contamination and required solutions.

    3. Boundary disputes: neighbouring landowners contesting boundary lines

    The problem

    Boundary disputes arise when there is uncertainty or disagreement over the exact location of a property boundary. These disputes are relatively common, particularly in rural or older properties where boundaries may have shifted over time. They often stem from poorly maintained documentation or unregistered land, and may involve encroachments such as fences, walls, or hedges. These issues can be particularly contentious, as they often involve deeply personal attachments to the land in question.

    The impact

    • Transactions are delayed as disputes must be resolved before completion.
    • Costs escalate due to legal and surveyor fees.
    • Emotional tensions between parties can complicate negotiations and lead to prolonged disputes.
    • The value and marketability of the property can be adversely affected until the dispute is resolved.

    Resolution

    • Boundary surveys: Commission professional surveys to establish boundary lines with precision.
    • Title rectification: Apply to the Land Registry to amend title plans if necessary.
    • Negotiation and mediation: Engage neighbouring landowners to resolve disputes amicably, often with the assistance of a neutral mediator.
    • Adverse possession claims: Consider adverse possession to formalise ownership where long-term use can be established.
    • Legal Action: If mediation fails, legal action may be necessary, though it should be considered a last resort.

    Time to resolve

    • Boundary surveys and mediation usually take weeks, if both parties genuinely want a conclusion.
    • Title rectifications or adverse possession claims may require months or even years. Legal proceedings can further extend these timelines.

    4. Unknown legal charges

    The problem

    Unknown legal charges are financial obligations, such as mortgages, that are registered against a property but not disclosed by the seller. These often emerge during title investigations. This situation often arises when a bank, as part of securing a loan, historically held the unregistered title deeds of the property for safety while simultaneously maintaining a nominal charge against the legal title. Errors or omissions in historical records can exacerbate the problem.

    The impact

    • Such charges must be resolved before completion, causing delays.
    • Buyers may hesitate if the seller’s financial position appears unstable.
    • These issues can raise concerns among mortgage lenders, further complicating the transaction.

    Resolution

    • Contacting lenders: Obtain evidence of discharge, such as a discharge certificate, a deed of release or a receipted legal charge.
    • Rectifying the title: Apply to the Land Registry to remove outdated or erroneous charges.
    • Proactive communication: Engage early with all parties to resolve misunderstandings or errors.

    Time to resolve

    • Resolving such issues typically takes 2-6 weeks, depending on lender responsiveness and the complexity of the case.

    5. Adverse possession claims

    The problem

    Adverse possession issues arise when a seller’s title does not include land they have occupied or used. For instance, a piece of garden land or agricultural paddock may not be registered under their ownership.

    The impact

    • Delays occur as the legal ownership of the land must be established before completion.
    • Buyers and mortgage lenders may hesitate to proceed if ownership is unclear.

    Resolution

    • Gathering evidence: Compile evidence of long-term use or occupation, such as utility bills, maintenance records, photos, boundary surveys or witness statements, along with your statement of truth.
    • Land Registry application: Submit an application for adverse possession to the Land Registry, using the evidence gathered.
    • Negotiations: Where disputes arise, negotiate with neighbouring landowners or involve a mediator to resolve the matter.
    • Buyer takes on responsibility: Although legally complex, the buyer could take on the responsibility of making the adverse possession application to the Land Registry. However, it is unlikely that the buyer would want the burden of this task.

    Time to resolve

    • Adverse possession applications can take 3-24 months, depending on the strength of evidence and any objections. This being said, it is not guaranteed that your application will be successful at the end of this period.

    6. Private access roads

    The problem

    Unregistered or poorly documented rights of way over private access roads can create uncertainty in transactions. Sellers may lack proof of legal access to the property. Not only does it make the property “land locked” it becomes ambiguous as to the maintenance of the road and the required maintenance contributions from the seller.

    The impact

    • Buyers may be unwilling to proceed without assurance of access rights.
    • There is doubt over the repair obligations for the private road.
    • Maintenance and repair financial contributions are unknown.
    • Disputes with neighbouring landowners may arise, causing further delays.

    Resolution

    • Investigating rights of way: Examine title documents, deeds, and historic records to confirm access rights.
    • Granting new easements: Negotiate and formalise an easement with the owner of the access road. Although once contact has been made, you are unable to obtain indemnity insurance.
    • Indemnity insurance: Provide protection against potential disputes over access rights.

    Time to resolve

    • Investigations and easement agreements typically take 4-8 weeks, depending on cooperation from all parties.

    7. Public footpaths and rights of way

    The problem

    Local authority searches can reveal public footpaths, bridal ways, or rights of way crossing the property that were previously unknown to the seller. These may impact the buyer’s intended use of the land.

    The impact

    • Buyers may require assurance that the paths will not interfere with their plans.
    • Negotiations may be needed to address the buyer’s concerns, causing delays.

    Resolution

    • Buyer proceeds: The buyer will usually have to proceed with knowledge that the public footpath exists.
    • Diversion orders: Apply for a diversion order to redirect the footpath if it significantly impacts the property’s intended use (subject to local authority approval).

    Time to resolve

    • Diversion orders may take several months to process and approve.

    Conclusion

    Other challenges often arise with easement creation, road ownership conflicts, and emerging boundary disputes. Ensuring clear documentation for easements can mitigate future disputes. For example, if an access easement is poorly defined, it could lead to disagreements about the width or permitted uses of the access road. Similarly, disputes may arise if maintenance responsibilities for a shared driveway are not clarified. Another instance involves easements for utility access, where failure to specify locations or conditions might hinder development plans. Addressing these issues proactively requires a tailored, professional approach that considers the unique circumstances of each property transaction.

    To navigate these complexities effectively and secure long-term seller and buyer satisfaction, seeking expert legal guidance is essential. Contact our team today for personalised advice and assistance. We specialise in identifying and resolving conveyancing challenges, ensuring a smooth and secure transaction process for all parties involved.