buying without title deeds
Posted: 11 May 2018 14:07
can anyone tell me the pitfalls of buying a property without title deeds , or is it something we should just never consider ?
Hi icebuddy
There are risks involved in buying off-plan and there is no way to guarantee clean Title. But having said that some improvements have been made to the laws in recent years.
E.g. If the land on which the vendor is building is mortgaged to the bank, you can now pay a proportion of that mortgage to the bank in exchange for a waiver – and the balance of the sale price to the vendor. (That gets around the ‘trapped buyers’ problem that affects some 70,000 purchasers.)
The main concern now (apart from the developer becoming insolvent) is any deviation from the approved plans for the development. (E.g. unfinished roads, pavements, green area, extra properties being built, properties wrongly located on the land, encroachment onto someone else’s land.) In these cases the planning authority will not issue a ‘Certificate of Completion’ but a ‘Certificate of Unauthorised Works’.
If the planning deviation is minor, the ‘Certificate of Unauthorised Works’ will result in a Title Deed with ‘notes’. Unless the minor deviation is and a ‘clean' Title Deed issued, this will affect the price of the property should you decide to sell.
If the planning deviation is significant, the ‘Certificate of Unauthorised Works’ will result in a Title Deed that prevents you selling or mortgaging the property until that significant deviation is cleared. (If one property on the development has a significant planning deviation, the Title Deeds for all the properties on the development will be issued with a Title Deed that prevents you selling or mortgaging the property. (The Interior Ministry admits that the local planning authorities are inconsistent – one planning authority will ignore some deviations, while another will be very strict.)
(A friend of mine who bought a property off-plan and cannot get the deed to his property as the developer installed the wrong type of sewerage system. The local Municipality has suggested the he pays for a biological waste plant that the developer should have installed – the cost will be in excess of €30k).
If you want a risk free purchase, focus your search on properties with Title Deeds (and make sure you appoint an independent lawyer to check everything out before handing over any money.)
Regards,