Freehold is the equivalent of the old ‘Fee Simple’. Freehold gives the legal owner full legal title and the right to ‘exclusive possession’ of the property.
With a Freehold title the legal owner has the right to occupy and deal with the property as they choose subject only to any covenants or other restrictions such as planning laws and buildings regulations imposed by the local authority and government.
The quality of a Freehold title may be subject to the ‘class’ of title awarded by HM Land Registry:
Absolute Title – This is the highest class of title available. It is equivalent of the original ‘Fee Simple Absolute in Possession’. The great majority of Freehold properties registered in England and Wales are registered with Absolute Title.
If a property is registered with Absolute Title, the legal estate is vested in the legal owner (‘Proprietor’) together with all interests subsisting for the benefit of the estate (for example, ‘Rights of Way’ or ‘Rights for the passage of water and drainage’ (legally known as ‘easements’) over adjoining land. The legal estate will also be subject to the burdens placed on the land, for example, covenants or easements in favour of adjoining land; but only those burdens that affected the legal estate at the time of first registration.
Possessory Title -Possessory Title is granted where the proprietor’s claim to the property is based on Adverse Possession or where the title deeds have been lost or applicant cannot prove their legal right to the property.
Possessory Title will be granted where the applicant is in actual occupation of the property or in receipt of rents and profits arising from the property and it is not possible to register the property under any to other class of title.
Possessory Title has the same effect as registration with Absolute Title except that it is open to challenge by another party who may claim a right to the property. If however, the proprietor of the Possessory Title holds the title without challenge for twelve years, they can apply to the HM Land Registry to have the title upgraded to Absolute Title.
As a general rule, Mortgage Companies and Banks will not provide mortgages for the purchase of property with Possessory Title. It may however, in some circumstances, be possible to obtain insurance to protect the lenders interest in the property and make the title acceptable to the lender.
Freehold Qualified Title – A Qualified Freehold is very rare. Qualified Freehold is granted where the applicant’s legal right to the property can only be established for a limited period of time or is subject to reservations the effect of which, combine to mean that the title is not a good holding title. An example of this, is where the transfer of the property to the owner is made in breach of trust, such as someone selling the property without the agreement of another party who has a legal interest in the property.
Source by Ursula Moore
