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Don't let historic titles trip you up

Charlotte Maclean explains the value of modern land titles during liability claims.

There are many benefits of holding a modern land registered title, and knowing what you own can also protect both you and your managing agents from public liability claims and a lot of unnecessary stress.

A client of CKD Galbraith recently found this out the hard way when a member of the public tripped on a pothole and injured himself while walking through an area of ground the estate was unaware it owned. The injured party made a public liability claim leading to a lengthy and costly investigation by solicitors to confirm ownership of the ground.

The main problem was that the estate in question held multiple historic titles of varying degrees of clarity; some included good title plans, some historic plans, and some had no plans at all!

The area where the man had tripped was included in the unmapped title, so ownership was difficult to confirm. The estate's solicitors advised that, as the estate had no prior knowledge of owning or using the area of land and as it was clearly being occupied and maintained by a third party, ownership (and therefore liability) would more likely be granted to the third party occupier, rather than to the estate.

For landowners with large, complex or historic titles, it is important to extend public liability cover to include land which the owner is unaware of owning, for exactly the situation described above. The estate in this case had such cover in place, but luckily the claim was not progressed once the ownership position was clarified. The reason for this though, was that the insurers began to pursue CKD Galbraith as managing agents of the estate. The estate's insurance broker has advised that there is a growing trend in insurers claiming against the managing agent rather than the owner.

It was ultimately agreed that neither the estate nor CKD Galbraith held responsibility for the ground, but it was a lengthy and complicated question which would have been avoided if the estate had already held a registered title.

There is cost involved in voluntary registration, but the estate has decided to go ahead. It considers that avoiding unknown liabilities and the potential benefit of discovering valuable assets both help to justify the expense.

Modern land registered titles will help to make such grey areas a thing of the past. Equally, where sales, transfers to the next generation, ownership restructuring or new standard securities are planned in the near future, voluntary registration is something to consider sooner rather than later, as it will simplify and speed up the process and potentially reduce unknown transaction costs.