Limited title guarantee | Practical Law

Limited title guarantee | Practical Law

Limited title guarantee

Limited title guarantee

Practical Law UK Glossary 1-107-6767 (Approx. 3 pages)

Glossary

Limited title guarantee.

One of the two key phrases used to imply covenants for title under the Law of Property (Miscellaneous Provisions) Act 1994 in an “instrument effecting or purporting to effect a disposition of property” (section 1(1)). The other key phrase is Full title guarantee. Limited title guarantee implies that:
  • The disposing party has the right to dispose of the property (section 2(1)(a)).
  • The disposing party will do all it reasonably can to give the title it purports to give, at its own cost (section 2(1)(b) and (2)).
  • If the property being disposed of is registered, there is a presumption that the whole of the property in the registered title is being disposed of (section 2(3)).
  • If the property being disposed of is not registered, there is a presumption that the interest being disposed of is the freehold. If it is clear that the interest is leasehold, it is presumed that the interest is the unexpired residue of the term of the lease (section 2(3)).
  • The person disposing has not, and as far as it is aware no one else has, since the last disposition of the property for value, charged or encumbered the property or granted any third party rights over it which still subsist (section 3(3)).
  • Where the limited title guarantee covenant is used in respect of the sale of leasehold property, additional covenants are implied: that the lease is subsisting and the seller has complied with its terms.