Full title guarantee & Limited title Guarantee

5 JUNE 2025 12:15

Sections 2 and 3 of the Law of Property (Miscellaneous Provisions) Act 1994 provide us with the statutory framework for identifying and applying full title guarantee and limited title guarantee.

Full title guarantee and limited title guarantee effectively covenant the sellers of a property.

Full title guarantee essentially provides a promise from sellers that:

• The seller has a legal right to sell the property.
• The seller will to the best of their ability provide the buyer with good title at the expense of the seller.
• If the seller is selling a registered title, an assumption is made that the entirety of the registered title is being sold.
• If the seller is selling an unregistered title, an assumption is made that the property is being sold as a freehold property.
• If the property is otherwise leasehold, an assumption is made that the seller is selling the remaining term of the lease.
• The seller is selling the property free of all mortgages/charges and any other interest in the property that any other third-party might have over the property

Limited title guarantee similarly provides these promises, however the seller, rather than definitively guaranteeing the property is free from all mortgages/charges and any other interest in the property that any other third-party might have over the property, merely guarantees this to the best of their knowledge.

This is due to limited title guarantee most often being the position when a property is being sold by and executor of an estate or by another party with limited knowledge of the property, such as attorneys, trustees and personal representatives. Essentially, the seller cannot guarantee the property is free from all mortgages/charges and any other interest in the property that any other third-party might have over the property. 

WHAT GUARANTEE IS RIGHT FOR YOUR SALE ?

Title guarantees are a vital aspect of the conveyancing process that provide assurances to buyers that sellers have the legal right to sell a property.

It is certainly beneficial to buyers that full title guarantee be the position upon exchange of contracts, as this ensures no party other than the seller can claim a legal right to the property; there are circumstances in which uncertainty might arise due to missing title documents, whether lost or destroyed, which makes it difficult to establish historic ownership.

Similarly, there can be gaps in the historic chain of ownership if past applications to register the property and update the title at HM Land Registry were not made correctly.

Under such circumstances, limited title guarantee can be negotiated advantageously between solicitors acting for both sellers and buyers, allowing transactions (after careful consideration and mitigation of potential risks) that would otherwise fall through, to proceed.

In doing so sellers can mitigate the risk of claims being made in relation to those gaps as well as any other unknown defects in the title, in addition to reducing costs to update a title that has not been updated for a substantial period of time. Likewise, limited title guarantee can also be a beneficial position when selling such properties with significant historic records, by limiting the guarantee to recent and therefore more concise records of ownership; limited title guarantee can be employed strategically to provide certainty and shorter transactional timescales.

NO TITLE GUARANTEE

If a property has been repossessed, the mortgagee/receiver selling the property will have little or no knowledge of the property. Under these circumstances, no title guarantee can be provided.

As a buyer, it is essential that you have the title thoroughly investigated before purchasing such a property at auction or by way of private treaty. Defective title insurance is often sought to mitigate risks that might not be identifiable upon initial investigations, such as an overriding interest (an interest over a property such as a right of way that is unregistered and therefore does not appear on title documents), that the seller has no knowledge of.

A buyer has no recourse against a seller selling with no title guarantee and buyers must also weigh the potential difficulties of selling such a property in future.

HOW CAN WE HELP ?

The team at Gomer Williams are skilled and knowledgeable professionals able to assist you with conveyancing matters throughout the country.

Whether you are selling or purchasing as an individual or a company, we’re here to help.

Please contact us at: contactus@gomerwilliams.co.uk

Or phone us on 01554 755 101. Our team will be delighted to assist you.

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