The Difference Between Full and Limited Title Guarantee
So what is the difference I hear you ask? Unless you are buying or selling a property you have probably never had recourse to ask yourself that question.
Most of the time, when you are buying a property, the guarantee governing the sale will be a full title. There are exceptions – for instance if a solicitor is selling a property on behalf of someone’s estate – in which case it may be a limited title that is set out in the contract.
Full Title Guarantee
A full and limited title guarantee contains certain covenants on the side of the sellers. Basically it assures, or promises, that the seller has the right to sell the property. In legal terms the following usually applies:
- The seller has the right to sell the property
- The seller will do their very best, and at their own costs, to ensure that the buyer has good access to the assets.
- If the property is leasehold it must be stated that the lease is still in existence and that the seller has done their best to maintain the lease.
- That the property is sold free from any encumbrances and any third party charges.
Limited Title Guarantee
This type of guarantee is most often used when a property is being sold by an executor of an estate – or when the seller might otherwise have no personal knowledge of the property.
This means that the seller cannot guarantee that no other persons have rights on the property or that there are no charges from third parties.
As far as the buyer is concerned it is much more beneficial to have a full title guarantee in place as it assures the buyer that nobody else can claim a right to the property. It may also make it difficult to sell the property in the future if full title guarantee cannot be offered.
From a sellers point of view – a full title guarantee can only be offered if they have full knowledge of the assets.
This is one of the many reasons that you should always instruct a trusted and professional firm of solicitors to act on your behalf. You don’t want to get caught out. The devil is in the detail.