• Purchasing A New Home Where The Seller-developer Has Adverse Possession

    By Guest on 18th Jan 2016

    My wife and I are interested in buying a property. We were informed that indemnity insurance will be required, and, during the process of better understanding the situation with our conveyance lawyer, it has become clear that part of the house was built on council land. Additionally, the conveyance representative has informed me that the title search reveals information which indicates that completion may be delayed considerably due to this issue. Although indemnity insurance is to be provided by the seller-developer, no where is it outlined that the cost of acquiring the adversely possessed land will be sustained by the seller. The property is being sold as is, and I am naturally getting nervous. Is there some means of getting the seller to enter into a contingency arrangement whereby intent of purchase of the adversely possessed (appropriated)land can be arranged?

  • 2 Answers

    By Guest on 19/01/2016

    One of the conditions of the indemnity insurance will be that no approach must be made to the owner of the land in question so as to place the land owner on notice of the issue. This would greatly increase the risk of the land owner taking action to evict and therefore invalidate the policy. If the seller is already registered asowner of the land with possessory title then the council or whoever can't reclaim the land and the only problem (which the insurance will cover) is that there may be rights over the property that are still exercisable or covenants that are still enforceable that you don't know about. The insurance covers your financial loss if, say, you have to knock the house down because it interferes with a right of way or right of light, or breaches a covenant. If the seller does not have possessory title and the identity of the landowner is known you should insist that the seller acquires the land by deed before you proceed to exchange contracts.

  • By Guest on 19/01/2016

    Thank you kindly for your advice. Indeed, we came to the same conclusion ourselves, particularly as no other solution appeared to exist.

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