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Indemnity on track to the land


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Hi 

we are all but ready to complete on a piece of land with out line planning where the lane to the land is in un known owner but the land owner of the plot has access.

we have just received an anonymous letter to say they think they know who owns the land and could possibly come out of the wood work to say they are not allowing us access.

our soliciter has said to take out an indemnity policy if this was to ever happen we would be covered.

but we are not sure if we could live with the cloud of knowing that could happen one day .

what are your opinions ? And do you think this decreases the value of the land ? 

And makes it harder to get a mortgage on a plot with an indemnity policy ? 

We are meeting the planning council today so that should help answer some questions.

but would love to know if any one else has had the same sort of problem ?? 

 

Many thanks 

Kirsty 

Edited by Plumberzanna
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Shouldn't it be the seller who is asked to take out the indemnity on your behalf, to ensure that access continues into the future? Or get the seller to get legal right of access before concluding?

 

There's now the moral issue too - if you take out an indemnity, will you divulge the information you received anonymously? Don't and its border-line fraud. Do and you're unlikely to get a policy. Its easy to say with hindsight, but this should have been at the forefront of your mind before agreeing to buy a piece of land - you have to ensure you legally have access to the land.

 

I'd also question why the anonymous person has come forward now - a good Samaritan or someone with something to benefit from the sale not going through.

 

I'd certainly think that land without legal access is worth less than land with legal access, and therefore would impact mortgage-ability. I'm not sure whether the existence of an indemnity policy itself would impact that, however.

 

What has your solicitor said about the legal access rights? Since he has recommended the policy, does that mean it does not exist? How long has the existing owner used the current access as that can have a bearing on assumed access going forward.

Edited by AliMcLeod
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First of all, stating the obvious, do not complete the purchase until this is resolved, as there looks to be a chance that you may end up with a near-worthless piece of land unless you can get an agreed right of access.

 

I believe that an indemnity won't work here, as you now have knowledge of someone who may have the ability to prevent access to the land (although because this letter was anonymous I suspect if may be a bluff from an objector).  An indemnity is fine when the identity of a landowner is genuinely unknown, despite best endeavours to find them, but in this case the landowner can reasonably be expected to be known, and refuse a right of access.

 

It should be the vendor's job to offer you the land free of encumbrance and with the necessary rights needed for you to be able to use it in the way in which the vendor has advertised it, so it's really up to them to get this sorted.  If they do choose to sort it by means of an indemnity policy then you need to check carefully to be absolutely certain that the indemnity covers the case when someone has claimed to know the owner of the access and threatened to refuse to grant the use of it.

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Before you meet anyone or talk to anyone you need to check with your solicitor that so doing will not poleaxe your opportunity to get an Indemnity Policy.

 

The principle of a Policy is that you are insuring against an unknown but calculated risk, and as it becomes more known and therefore predictable the risk of the event occurring decreases or increases, and then if increasing becomes uninsurable at a reasonable premium. Practically, your anonymous letter may already have killed the opportunity. Not my specific expertise, but be aware - others may have more precise knowledge.

 

IMO it would probably reduce the value of the land, either by the amount you need to pay to persuade the person who owns the ransom strip to let you have access (which would technically be up to a third of your increased value by having the access), or by an amount to reflect the risk of such circumstances materialising, plus costs.

 

Of course your anonymous letter could be some failed objector chancing their arm, in an effort to stop the development ... after all, the outline permission will expire in 3 years from the approval date, and if it has been stopped once, the owner may back off permanently, muttering into their beard . Cui Bono?

 

If you do get your policy, then should the owner emerge you will have the problem of negotiating access. If they own it and you cannot demonstrate a Right of Access or find an alternative, then you cannot proceed without permission, which could just be withheld; you cannot compel x to make a contract with you, even an offer of ££££ may not be accepted; they may just want peace and quiet.

 

But all of that depends on the risk of the event - lane owner reappearing and demanding something - occurring.

 

Any way, I agree with the others .. you need to throw this back to the seller to resolve, or take the risk yourself. The second course of action is one for a speculator to take, which may not be you.

 

Ferdinand

 

 

 

Edited by Ferdinand
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Definitely get the seller to sort it.

I have an indemnity policy - can't go into details as it is specified in the policy that the information cannot be divulged.

 

My buyers solicitors have asked for this policy and wouldn't proceed without it.

 

In this case

1 I have been told the codicil is unenforceable because of the way that it is worded

2 The people who could potentially benefit are known but they do not know they have this.  If I had spoken to them about this then I would not have been able to  get the policy.  

 

The fact that it is unenforceable is irrelevant because that wouldn't necessarily stop them trying to enforce it which would mean high legal fees.

 

 

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Soliciter has gone back 30 years and no info is on the track/lane with land registry 

the anonymous letter said that the lane owner let the surrounding farmers/neighbours have use of the lane in the 60’s for tractors as it was used as a nursery.

but will he object to residential if he knew ??? 

Now the land owner  is saying he went to court to get legal access and there was a notice for the lane owner to come forward but never did . But he is only telling us this now and he were seen the land 14 months ago .

we have asked him to send that to our soliciter so we shall see.

there is a new huge housing devoplement across the field from the land which they are going to connect with a pedestrian / cycle path along the lane so the council have permission or are taking a gamble on the lane owner coming forward and just paying them off ?? 

So confused it is a massive risk, it really is the house of our dreams in a lovely area but could go so wrong .

 

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Does the lane have a public right of way over it?  That might be what is enabling the creation of a footpath / cycle route. So at least you can walk or cycle to your house.

 

At the moment the access is the vendors problem.  Make sure you don't commit until this is resolved otherwise it may become your problem.

 

 

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If there is already ped/cycle access then they are probably allowed to improve the surface, as the dominant user can on Rights Of Way.

 

He would not object to residential OP, he would need to stop unlawful vehicular use of the lane, such as cars or diggers to your plot. He would send you a letter, potentially take up an injunction (not *that* expensive if he could potentially make 10 or 20k) or he could just install something to allow permitted uses and stop vehicles reaching your site.

 

30 minutes ago, Plumberzanna said:

So confused it is a massive risk, it really is the house of our dreams in a lovely area but could go so wrong .

So keep digging and researching until you have enough info so you can make a yea or nay decision that you are confident is for the right call. Then at least you have the satisfaction of getting it right. You will know that you can have your house or have avoided an elephant trap.

 

F

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Just an additional thought.  As well as a right of access to the plot, will you also need a right to put services under the access track/lane as well, or will they be able to get to the plot without needing to go over or under the access?

 

This may have a bearing if there is found to an existing right of access for people and vehicles, as it may well not include running services as well.  Some utilities can (when pushed very hard) use their statutory powers to put services under land, but I believe this may only apply to water and sewerage; I'm not sure if the other utilities have such statutory powers.  It's a bit of a moot point anyway, as when I discussed this with Wessex Water years ago they made it clear that they would be very reluctant to use their statutory powers and would rather that we find an alternative route, even if that meant digging up 140m of single track lane and restricting access to half a dozen houses for a day or two.

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3 hours ago, Plumberzanna said:

And makes it harder to get a mortgage on a plot with an indemnity policy ? 

 

They would either refuse a mortgage, or reduce the value to that which excludes potentially unlawful operations not covered by indemnity.

 

Eg I have one where the parking space is potentially inaccessible due to exactly this vehicular access issue , so I would only get a mortgage for valuation without a parking space.

 

Of course the valuer might not notice ... ?.

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Righto, not sure if it helps but your tale bears similarities to my own.  The lane to my plot serves 3 properties, it is an unmade, unadopted and also a public right of way.  No one knows who owns it - my solicitor and everyone tried to find out but to no avail.

 

My solicitor then had some legal letter from their solicitor to say access had been established and on going for yonks so the right to access had been established and there is no drama.  I had no reason not to believe him but chose to pay for an indemnity myself...peanuts at £160.

 

So the right to services saga.  I didn't know if the utilities would have the necessary wayleaves etc to dig up the lane to lay a new connection if the owner was unknown.   Applied for water and they said ok, crack on and find the main, lay a pipe to it and we will connect.  So they weren't bothered so I weren't either.

 

Electric would not give an answer as to whether they could provide a connection until I actually paid to get one in.  Spoke to their wayleaves department, everything to no avail.  Soo...to solve this we exchanged contracts on the proviso if an electric supply was not forthcoming then all bets off.

 

I paid the cash, spoke to the engineer and their wayleaves department - they looked, couldnt find who owned it and basically said "feck it - nay bother, we will dig the lane (70m) and put your supply in, if someone complains then we will deal with it then".  Cool, the lane is only 3m wide, so let the neighbours know, they are sound as a pound, the ramblers just had to deal with it.  The guys came out, laid the cable and jobs a good en.

 

Water was a saga....i dug loads of the lane up and couldn't find it - the main  turned out to be in the neighbours garden!  Anglian dug the lane up trying to find it without giving two hoots who owned it.  They were only bothered at the top in case they dug council owned land.

 

Soooo, long story short....it was a lot of hassle trying to find out who owned it but from a utilities pov they didn't care.

 

Do your due diligence to satisfy yourself and go from there.  At some you need to decide to take the plunge or walk away but only you can decide what the risk means to you - acceptable or not.

 

As an aside I have sewerage getting dug in soon once Anglian tell me I can proceed - again the contractor sees it as a bonus in not having to bother with road permits and the like.  I showed him where I want to connect and he said nay bother!

 

Good luck. 

Edited by LA3222
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After speaking to the planning consultant we have been pretty much advised what some of you have said , it is totally up to the seller to find the owner of the lane before .

as it is quite likely to be un-mortgageable .

we have also found out from the planning that we are the fourth people to apply for pre app so obviously something isn’t right with it .

i feel gutted as thought the seller was genuine and was being honest but clearly wasn’t .

 

we will do some more investigating in to the lane owner and see if I can get any where with the name lead from the anonymous letter we received .

 

thank you for all your advise 

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