On the first registration of a title to a property the HM Land Registry will grant a 'class' of title.  The class of title granted to a title, will depend on the quality of the evidence of the owners legal right to the title that is provided to the HM Land Registry. The lower the quality of evidence provided – the lower the class of title is granted; the higher the quality of the evidence provided- the higher the class of title.

Where a property has a higher class of title right of the legal owner to that title is less likely to be successfully challenged. The lower the class of  the title to the property – the more likely it is that the right of the legal owner can be challenged. This means that property with a lower class of title is less valuable, as it is more difficult to raise a mortgage to purchase such a property.

The classes of title awarded are as follows:

·         Freehold Title Absolute

·         Freehold Possessory

·         Freehold Qualified Title

·         Leasehold Absolute Title

·         Leasehold Possessory Title

·         Leasehold Qualified Title

·         Good Leasehold Title

Freehold Classes of Title 

Absolute Title

Absolute Title is the highest class of title available. Absolute Title is the equivalent of the original 'Fee Simple absolute in possession'. The great majority of registered Freehold Titles in England and Wales are registered with Absolute Title.

The title to a property may be registered with absolute title if the registrar considers that the title is such that 'the willing buyer could properly be advised by a competent professional adviser to accept'

If the registrar considers that a defect in the title is such that it will not cause the holding under the title to be disturbed, he may still grant Absolute Title.

If a title is registered with Absolute Title, the legal estate is vested in the legal owner ('Proprietor') together with all interests subsisting for  the benefit of the estate ( for example, 'Rights of Way' or 'Rights for the passage of water and drainage' (otherwise known as 'easements') over adjoining land.  The legal estate will also be subject to burdens place on the land, for example, covenants or easements in favour of adjoining land; but only those burdens that affected the legal estate at the time of first registration.

Possessory Title

Possessory Title is granted where the proprietor's title is based on Adverse Possession, or where the title deeds have been lost or the legal right to the title cannot be proved.

Possessory Title will be granted where the person applying for the Possessory title is in actual occupation or in receipt of rents and profits and it is not possible to register the title under any other class of title.

Possessory Freehold title has the same effect as registration with Absolute Title except that the proprietor's legal right to the property is open to challenge by another party. If however, the proprietor of the Possessory Title holds the title without challenge for twelve years, they can apply to the HM Land Registry to have the class of the Possessory title to be upgraded to Absolute Title.

As a general rule, Mortgage Companies and Banks will not provide mortgages on properties with Possessory Title. It may however, in some circumstances, be possible to obtain Title Insurance to protect a lenders interests.

Freehold Qualified Title

A Qualified Freehold Title is very rare. Qualified Freehold Title is granted where the applicants legal right to the title of 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 a good holding title.  An example of this, is where the transfer of a property is made in breach of trust, such as someone selling without the agreement of another party who has a legally enforceable right in the property.

Classes of Leasehold Title

Leasehold Absolute Title

Leasehold Absolute Title will only be granted where the Freehold (and any other intermediary head lease titles) have been granted with Absolute Title or if unregistered has been deduced to the satisfaction of the registrar at HM Land Registry.

Again, as with Freehold Absolute Title, the title must be such that 'the willing buyer could properly be advised by a competent professional adviser to accept' and that it the lessor's right to grant the lease has been approved by the HM Land Registry.

As with Freehold Absolute Title, if the registrar considers that a defect in the title is such that it will not cause the holding under the title to be disturbed, he may still grant Absolute Title.

A Leasehold Absolute Title is subject to the implied rights and express covenants, obligations and liabilities attached to the Freehold Title aswell as the Leasehold title including the covenants, obligations and liabilities in the Lease.  Generally a lease has to be for a term of  at least seven years to be registrable.

Leasehold Possessory Title

As with Freehold Possessory Title, Leasehold Possessory Title is granted where the proprietor's title is based on Adverse Possession, or where the title deeds have been lost or the legal right to the title cannot be proved and  the person applying for the title is in actual occupation or in receipt of rents and profits and it is not possible to register the title under any other class of title.

 Leasehold Qualified Title

A Qualified Leasehold  Title is very rare. Qualified Leasehold Title is granted where the applicants legal right to the title of 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 a good holding title. An example of this, is where the transfer of a property is made in breach of trust, such as someone selling without the agreement of another party who has a legally enforceable right in the property.

Good Leasehold Title

Good Leasehold Title is awarded in circumstances where the Freehold title (or intermediate title out of which the Good Leasehold Title is being granted) has not been deduced to the HM Land Registry. In these circumstances there is no guarantee that the lease has been validly granted. The proprietors right to the Leasehold Title and even the title's existence,