Define: Grade Of Title

Grade of title refers to the level of quality or assurance associated with the ownership rights to a property. It assesses the extent to which the title is free from defects or encumbrances and the degree of confidence a buyer can have in the ownership of the property. Titles are often graded on a scale ranging from “good and marketable” to “clouded” or “defective.” A higher grade of title indicates fewer risks and a stronger guarantee of ownership rights, while a lower grade may suggest unresolved issues or potential claims by third parties. Understanding the grade of title is essential for buyers and lenders in real estate transactions as it helps assess the property’s value and the level of risk associated with the purchase.

In Registered conveyancing, the registry entry for each Freehold or Leasehold Registered Title shows the ‘grade’ of title. There are three grades for freehold and four for leasehold.

The freehold grades of title are as follows:

1. Absolute freehold. This is the nearest thing to outright ownership of land that English law recognises
2. Possessory freehold. The proprietorship of the land is evidenced by the fact of possession. This situation may arise when, for example, the owners of an unregistered estate decide to register it, but have mislaid the title deeds that prove their ownership. A person who buys an estate with possessory title will be bound by any interests in the land that were in existence before registration.
3. Qualified freehold. This category is extremely rare. It arises when the registrar allows a title to be registered where there is some uncertainty about the state of the proprietor’s title (perhaps, for example, when the title deeds only go back 12 years rather than 15).

For leasehold, we have the following:.

1. Absolute leasehold. The title of the leaseholder is as strong as it can be, and_ the landlord’s title is itself registered as absolute. A leaseholder may be able to persuade the registrar to register his title as absolute even where the landlord’s title is unregistered, but this will be difficult as the landlord may not want to allow the tenant to see evidence of his own title. However, the granting of a lease of over 7 years is now one of the events triggering first registration, so there will be fewer instances where the lease is registered and the freehold is unregistered.
2. Good leasehold. The leaseholder’s title is absolute, but the registrar cannot be sure of the strength of the landlord’s title.
3. Possessory leasehold. The leaseholder’s title is evidenced by possession
4. Qualified freehold. There is potentially some defect in the leasehold title

This site contains general legal information but does not constitute professional legal advice for your particular situation. Persuing this glossary does not create an attorney-client or legal adviser relationship. If you have specific questions, please consult a qualified attorney licensed in your jurisdiction.

This glossary post was last updated: 14th April 2024.