Splitting Title Or Splitting Hairs

Our expert Property team are frequently asked about the merits of splitting an existing freehold title. Here we outline some recent examples from our clients and how we can help.

Some common reasons clients come to us for advice about splitting titles are:

• Clients wish to sell off separate plots out of a parent title, such as selling garden land to a developer. There is a frequent misunderstanding that this should be done by splitting the title in advance of a sale, when in fact this is best and most efficiently dealt with by separate sales of each plot using transfers of part (a TP1 form);
• The intention to mortgage only part of the land, which can sometimes cause an issue for large institutional lenders who will require a charge over the land;
• The property is a mixture of commercial and residential property. This may cause issues, for example, if there is an intention that the property will be transferred into a pension fund or SIPP. As a matter of compliance, the pension fund cannot usually hold residential property.

Whilst a property owner or their conveyancer can apply to the Land registry with their proposal as to how they want their existing single title split, in our experience, they are largely reluctant to grant such requests.

So, in declining to split titles are they just splitting hairs?

In our view, not really, as to split an existing title can cause as many problems as it solves. Dividing a single parcel of land raises questions such as rights of way, rights of services, and covenants necessary to protect the enjoyment and amenity of each parcel of land.

These questions are usually best resolved on sales or leases of part, as whilst the land is all in the same ownership you cannot grant yourself rights or covenants. Transfers of part are common, and whilst they may take longer for the land registry to process, in terms of the sale or lease transaction they do not cause any delay.

Both the Commercial and Residential Property teams at Fosters Solicitors are always happy to advise on any title related issues. Please call us on 01603 620508 or email us and we will contact you back as soon as possible.