Updating legal titles for properties might be a task that falls down a to-do list but failing to keep a title up to date can have significant consequences. It’s an important task and, in practice, should always be done after a change in circumstances, such as after the death of an owner or a change in equitable ownership.
Before looking at the reasoning behind updating a legal title, let’s first understand what it means.
What are legal titles?
Practical Law defines the legal title as the ‘Absolute ownership of real property that is enforceable in a court of law. Legal title to real property is evidenced by a deed that is recorded in the public records in the county where the property is located.’
Essentially, legal titles detail the property address, ownership and any restrictions, charges, and encumbrances.
Why is it important to ensure legal titles are up to date?
In the event of a dispute regarding a property the legal title is often the first thing which is examined. Therefore, keeping the title up to date is not only good practice but almost essential.
In some situations, it is possible for the legal title to be held differently from the equitable ownership. For example, a Declaration of Trust can be signed, moving the equity of a property into a Trust or to another owner. However, unless the legal title is updated, this would not be apparent to the outside world.
By updating the legal title, any third party who wishes to obtain a copy of it will be able to see the existence of the Declaration of Trust affecting the equitable ownership. This is especially important in the context of estate planning.
As registered property is now logged digitally with the Land Registry, obtaining a copy of the title is easier than ever. Consequently, in the event of a challenge to a client’s lifetime estate planning, the Local Authority is likely to examine the property title to see if there is any reference to a Trust or some form of estate planning. If there is not and there is only a Declaration of Trust in place, the Local Authority is likely to query it. This alone highlights the importance of updating legal titles.
It is also important to keep the legal title to a property up to date with more everyday things such as a name change after marriage or removing a deceased owner after death. Legal titles are looked at prior to many applications affecting a property, such as a mortgage or equity release, and therefore should be corrected alongside any changes.
Making title amendments smoother
With our experienced Legal team, CTT Group is here to help you apply for title changes under a range of circumstances, including:
- If there is a deceased owner on a title
- When changing ownership, such as a sole to joint transfer
- First registrations for unregistered properties.
We can easily complete a transfer and update a title or apply for a past owner to be removed while placing the property into Trust.
Whilst the legal title is easily accessible and relatively simple to update for registered properties, this is somewhat more difficult when dealing with unregistered properties. If a client’s property is unregistered, then the legal title to the property is comprised of the original title deeds alone. If this is the case, we would recommend that the property is registered digitally with the Land Registry, and this is a service which CTT Group are able to provide.
CTT software, training and further support
Our Legacy software is being improved to make the first registration process easier than ever. The updates will ensure that the application can be input into Legacy quickly, capturing all necessary information so the case can run smoothly. If it hasn’t already, a video explaining the updates will be posted within the software and also within Adviser Chat in the upcoming weeks.
Additionally, CTT Group provides a variety of courses to help you expand your knowledge and improve your business services. For example, our Will Writer to Estate Planner course includes the conveyancing process on the third day, and it has so far proven to be popular with many advisers. If you’d like to sign up for the next running of this course, please click here.
In summary, it is important to keep the legal title of your property as updated as possible, and this is something that should be taken into consideration when a change in circumstances affecting a property occurs, failing to do so may lead to delays when further dealing with a property.
If your clients have recently had a change in circumstances affecting their property and are yet to formalise this on the legal title, please contact us for help. We can deal with both registered and unregistered properties.
Alternatively, if your clients are looking for estate planning, please get in touch and we will be able to provide a recommendation and also carry out any conveyancing work as necessary.