A title split involves dividing a single parcel of land, registered under one title, into multiple titles. This typically happens when a part of the land is sold or leased. When this occurs, the portion of land being transferred is “split” from the original title, and a new title is created for the newly defined parcel.
HM Land Registry will only accept an application to split a title if the split is part of a change in ownership. This means a title can only be split under the following circumstances:
- When part of the land is sold or transferred to a third party; or
- When part of the land is leased to a third party (if the lease is registrable).
You cannot transfer or lease land to yourself. So, if you need to split the title and retain ownership, you’ll need to transfer or lease the land to a separate entity. This could be a company you own, allowing you to maintain beneficial ownership.
Before proceeding with a title split, make sure to consider the following:
- Financial Advice: Seek guidance on the tax implications of splitting the title.
- Land Registry-Compliant Plans: Have plans drawn up by an architect that meet Land Registry requirements.
- Rights of Access and Easements: Consider any easements or rights of access for services that may be needed.
- Lender’s Consent: If you have a mortgage, ensure you have your lender’s consent.
For more in depth consideration please refer to: Title Splitting – Important Considerations to Keep in Mind – Oliver & Co Solicitors Cheshire
FAQ:
I have bought a freehold building and turned it into three flats to sell– do I need to title split?
Yes, you will need to split the title, but this can be done when you sell each flat to a third party by creating three individual long leasehold interest. It’s not necessary to do this before the sale.
You will need to consider who will hold the freehold title, and it may be that the freehold title is transferred to a management company of which the flat leaseholders all have a share.
I am building a house at the bottom of my garden – do I need to split the title?
You don’t need to split the title during the development process, and the split can be done when you sell the property to a third party.
I’m buying a plot of land with ten properties on it, and wish to split this when I buy it- can I do that?
Yes, you can arrange this as part of the purchase process, provided the seller agrees. However, the seller may not want to bear any additional costs associated with the title split. As a result, your solicitors will likely need to prepare the necessary transfer documents for the title split.
Can I split my title but still retain ownership of both parts?
You cannot transfer the title from the same entity, i.e. Mr Smith cannot split a title via a transfer to Mr Smith. However, you can transfer the title to a different entity, such as a company you own, while still retaining beneficial ownership. For instance, Mr. Smith can split the title by transferring it to Mr. Smith Property Ltd (a company where he owns 100% of the shares).
