How often do you review your title or lease plans once the dust has settled and you are in occupation?
Chances are the answer will be never! But beware falling into this trap. We frequently come across situations which could easily have been avoided if the landowner had checked before carrying out works on site or refinancing. Ongoing awareness of what might be considered as “fairly obvious” could avoid future legal and other fees, delays and distress.
Examples of issues caused by not monitoring boundaries which have recently come across our desks include:
A company has occupied a property for several years.
The original site manager moved on and the lack of continuity and original knowledge means that the line between the company’s boundary and areas over which it only has rights become blurred…. does the company own that car park or simply have a right to park there? Mistaken belief of ownership can result in alterations and improvements being made on land not owned or leased (often without landlord’s consent where a property is leasehold) for example, by installing better lighting, directional signage, re-configuring the layout etc. This results in complications such as retrospective applications for consent for alterations (where the site is leasehold) or to reinstatement of works (where the works are on someone else’s property or the landlord legitimately refuses to grant retrospective consent) – wasting time and money in implementing the works in the first place and then removing them.
Does the fencing on site coincide with the boundary markings on the title plans?
Landowners and occupiers must take care to avoid not knowing the extent of their responsibility for maintenance and repair of land which falls outside what they thought was their boundary fence/line. This can be potentially serious if someone or something is injured or damaged on that land and the landowner is deemed to be liable. If the fence is in the wrong place, have you managed to acquire title or rights over land not within your ownership? How do you ensure that such land is registered alongside your main site to avoid difficulties on any sale or refinance?
Conversely, what if someone has encroached on land you own?
Walk your own boundaries periodically, particularly where you own large areas of unoccupied and/or overgrown land. It is not unusual, for landowners to discover neighbours have moved fences to enlarge gardens, extend storage areas, or have extended patio or paved areas and planted flowerbeds on land not in their ownership or, more unusually (but not unheard of), actually built on otherwise empty sites.
If in years to come the land is mortgaged or remortgaged, the lender’s solicitor must confirm categorically that the title boundaries are identical to the land described in the valuation report.
Any discrepancy will be investigated – resulting in delays to completion of the financing or refinancing and the expense of implementing title defect insurance, applying for possessory title, obtaining statements of truth regarding ownership etc. If the discrepancies are substantial or relate to key areas (such as access), an inability to demonstrate good title could impact on value or lead to retentions in loans pending satisfactory resolution. These could significantly affect a business’s financial position.
As with everything – knowledge is key – know your boundaries. The importance of site visits on acquisition or any dealings with the land and of ensuring all site managers know the correct boundary locations and other rights granted under a lease or other title document cannot be stressed enough.
Solicitors and other advisers should always be happy to undertake site visits and boundary walks with you and be on hand to address any concerns.