Freehold is the equivalent of the old ‘Simple Fee’. Freehold grants 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 occupy the property as he wishes, subject only to any covenants or other restrictions, such as planning laws and building regulations imposed by the local authority and the government.
The quality of a freehold title may be subject to the ‘class’ of title granted by HM Land Registry:
Absolute Title – This is the highest title class available. It is equivalent to the original ‘Fee Simple Absolute in Possession’. The vast majority of Freehold properties registered in England and Wales are registered with Absolute Title.
If a property is registered with Absolute Title, the legal patrimony is conferred on the legal owner (‘Owner’) together with all the interests that subsist for the benefit of the patrimony (for example, ‘Rights of way’ or ‘Rights for the passage of water and drainage ‘(legally known as’ easements’) on contiguous lands. The legal patrimony will also be subject to the charges imposed on the land, for example, agreements or easements in favor of contiguous lands; but only those charges that affected the legal patrimony at the time of first registration.
Possession Title – Possession Title is granted when the owner’s claim to the property is based on Adverse Possession or when the property titles have been lost or the applicant is unable to prove their legal right to the property.
Possession Title will be granted when the applicant is occupying the property or receiving income and profits derived from the property and it is not possible to register the property under any other type of title.
The possessory title has the same effect as the registration with the absolute title, except that it is open to challenge by another party that can claim a right to the property. However, if the owner of the Possessory Title has the title without challenge for twelve years, he can request the HM Land Registry that the title be updated to Absolute Title.
As a general rule, Mortgage Companies and Banks will not grant mortgages for the purchase of property with Possession Title. However, in some circumstances, it may be possible to obtain insurance to protect the lenders’ interest in the property and make the title acceptable to the lender.
Qualified Freehold Title – A qualified freehold title is very rare. Qualified freehold is granted when 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 title to the property. An example of this is when the transfer of property to the owner is done in breach of trust, such as when someone sells the property without the agreement of another party who has a legal interest in the property.
