Can I buy land that has a charge on it?

Yes, and most mortgaged property is sold while charged. The charge is discharged from the sale proceeds as part of completion, with the mechanism written into the sale agreement and the money conditional on it. What you must never do is pay the seller and rely on them to settle the lender afterwards.

What is a caution on a title?

A registered claim to an interest in the land, lodged by somebody such as a spouse, a beneficiary, a party to a dispute or an earlier buyer. It is a stop sign, and it has to be understood and properly removed rather than worked around, because it was placed there by somebody deliberately protecting a claim.

Will a land search show every interest in the land?

No. It shows what is registered. Unregistered interests, such as somebody in occupation with a claim, an earlier unregistered agreement or a family arrangement, do not appear. That is why an unannounced site visit and conversations with neighbours sit alongside the search rather than replacing it.

Encumbrance

Also called: charge · caveat · caution · restriction · incumbrance

Any right or interest registered against a property that limits the owner's ability to deal with it freely, most commonly a bank charge, but also cautions, caveats and restrictions.

An encumbrance is somebody else's interest sitting on your title. It does not necessarily prevent a sale. It means the sale has to deal with it.

The kinds a buyer meets

Charge. The property is security for a loan. Extremely common and entirely normal, and most mortgaged property is sold while charged. The mechanism is that the loan is discharged from the proceeds and the charge is removed as part of completion.

What you must not do is pay the seller and trust them to settle the bank afterwards. The discharge is built into the transaction, with the money conditional on it, and the sequence is an advocate's job.

Caution or caveat. Somebody has registered a claim to an interest: a spouse, a beneficiary, a party to a dispute, a buyer under an earlier agreement. This is a stop sign. It has to be understood and properly removed, not worked around.

A caution is worth taking seriously precisely because it was registered by somebody who took a deliberate step to protect a claim. "It is just a family thing, it will be removed" is a description of a dispute, not a resolution of one.

Restriction. A limitation on dealing with the title, sometimes requiring a third party's consent before any transfer. See consent to transfer.

Lease. A registered lease is an interest in the land, and it survives a sale. A buyer purchasing a let property is buying the tenancies with it.

Easement or wayleave. A right over the land for access, drainage, power lines or pipes. It does not prevent a sale and it may materially affect what can be built.

What to do about one

Find it before money moves. An encumbrance discovered late is a renegotiation. Discovered at the last minute it is a collapsed transaction. Do the search first.

Get the mechanism in writing. "The seller says it will be cleared" is not a plan. The mechanism for clearing it belongs in the sale agreement, with the money conditional on it and with a defined consequence if it is not cleared.

Re-search immediately before completion. Encumbrances can be registered at any time, including after your first search and before your transfer.

The one that is not on the register

The most dangerous interests are frequently the unregistered ones: somebody in occupation with a claim, an earlier agreement never registered, a family arrangement, a beneficiary under an estate.

A search will not show these. A site visit, unannounced, and a conversation with neighbours sometimes will. This is why physical inspection is not a formality even where the register is clean.

What goes wrong

A charge is treated as a formality. It usually is routine, and the routine version still requires a mechanism.

A caution is negotiated around rather than removed. The person who registered it is a person with a claim, and the claim does not evaporate on completion.

Only one search is done. At the start, months before money moves.

The buyer relies on the seller's advocate. Both sides having their own representation is the normal arrangement for a reason.

Common questions

Can I buy land that has a charge on it?: Yes, and most mortgaged property is sold while charged. The charge is discharged from the sale proceeds as part of completion, with the mechanism written into the sale agreement and the money conditional on it. What you must never do is pay the seller and rely on them to settle the lender afterwards.
What is a caution on a title?: A registered claim to an interest in the land, lodged by somebody such as a spouse, a beneficiary, a party to a dispute or an earlier buyer. It is a stop sign, and it has to be understood and properly removed rather than worked around, because it was placed there by somebody deliberately protecting a claim.
Will a land search show every interest in the land?: No. It shows what is registered. Unregistered interests, such as somebody in occupation with a claim, an earlier unregistered agreement or a family arrangement, do not appear. That is why an unannounced site visit and conversations with neighbours sit alongside the search rather than replacing it.