Claim Case Study Scotland: Lack of title Background
Solution
In 2010 the insured obtained a policy from First Title covering lack of title to an area of land they occupied. This property was on the periphery of a larger area of land which the insured owned and had good title. The policy limit was £6,000,000. The insured was registered as the owner of the property via an a non domino disposition. However, in 2012 the Registers of Scotland removed the insured’s title to the property following a rectification application by a neighbour, R.
First Title arranged for a valuation of the property, which suggested its value was between £500k and £725k.
Challenge In 1992, R had sold the insured 18 hectares of land, including the property, and the insured had been in possession since this date. However, R claimed that the property did not form part of the 1992 transfer. The insured had agreed to sell land to a developer for £4.5 million, and the property was to serve as the access way to the development. R was aware of this and wanted to use the access way as a ransom strip.
First Title decided to bring an action for rectification against R in the insured’s name. First Title issued proceedings and began to obtain documentary evidence and witness statements. The basis of the case was that the plan to the 1992 transfer, which suggested that the property did not belong to the insured, was contradicted by the missives of sale and R’s subsequent conduct. A mediation was later arranged with R, which First Title attended with the insured and the parties’ lawyers. However, no agreement could be reached. First Title subsequently offered £275k (including a contribution by the insured). R counter-offered £300k but made a series of additional demands which changed frequently. First Title believed that the insured’s proposed sale to the developer had left R regretting the 1992 deal. First Title explored several other options, including sending the case against R to trial but settled with R for £330k, of which First Title contributed £205k. Upon payment, R transferred the property to the insured with full title.
Call: +44 (0)141 413 8800 Email: scotinfo@firsttitle.co.uk Visit: www.firsttitle.co.uk First Title Insurance plc is authorised by the Prudential Regulation Authority and regulated by the Financial Conduct Authority and the Prudential Regulation Authority. First Title Insurance plc is registered in England under company number 01112603. Registered office: First Title Insurance plc, ECA Court, 24-26 South Park, Sevenoaks, Kent TN13 1DU.
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