CurveBlock
In England and Wales, the Land Registry provides the primary public record of title, but registered title still carries potential encumbrances. Restrictive covenants can limit use, development or alteration; easements grant third‑party rights of access, services or light; and charges or mortgages create repayment priority that affects residual value. A thorough title search and review of the property register and title deeds is the first line of due diligence for any investor exposure.
Leasehold interests introduce further complexity. Lease terms set rent, repair obligations, break options and alienation controls; lease expiry and enfranchisement risks can change cash flows and valuations. For multi‑unit or managed estates, service charge regimes, sinking funds and reserve policies influence ongoing cash requirements and the likelihood of special levies. Commonhold remains an alternative tenure but has limited penetration and governance differences from leasehold.
Planning obligations, section 106 agreements and local planning conditions can impose developer contributions or restrict future changes. Contamination, environmental obligations and easements for utilities may require remedial works or constrain redevelopment. Title indemnity insurance can mitigate some risks, but insurers exclude certain latent defects and indemnity coverage can be time‑limited.
Fractional investment platforms must disclose how they investigate title risk and whether they use indemnities, escrow or special purpose companies to isolate liabilities. Retail investors should seek clarity on the precise legal interest being offered (share in an SPV, beneficial interest, leasehold share) and on the platform’s procedures for managing title disputes, encumbrance enforcement and ongoing covenant compliance.