The Bank Lost Our Title Deeds: What Are Our Legal Rights?

by David Shoo; Updated September 26, 2017

Title deeds are legal documents that show proof that you are the rightful owner of a property. Banks have always preferred that you hand over your title deed to them as security when you borrow a loan. However, when your bank loses your title deed, it does not stop you from owning the property. You are still entitled to some legal rights.

Defense against Mortgage Foreclosures

If the bank loses your title deed, it is in breach of your contractual obligations. In that case, you have the right to file a defense against foreclosure lawsuit to stop the bank from auctioning your property to recover the money you owe it (in case you had defaulted on paying the loan). The loss of your title deed puts you in a position to defend yourself successfully in the court against a foreclosure lawsuit by the bank. Consider hiring a licensed attorney to delay or even defeat the foreclosure completely, or perhaps negotiate with the bank to settle the matter with you in some equally beneficial way. Your attorney will argue that the bank has no right to claim foreclosure of your property as documents detailing your contract with the bank are nonexistent or unavailable, since your defense is based upon documentary evidence.

Right to Lease

The transfer of property act states that so long as you are in possession or control of property, such as land, you have the right to lease the property in the normal course of managing the property. Therefore, when the bank loses your title deed, it does not stop you from leasing the property. Furthermore, you have the right to receive rents and profits from the property even as the bank makes arrangements to replace your title deed. (

Right to Control the Property

If the bank loses your title deed while you are still making regular payments for the mortgage, you still have the right to control the property. As long as you have not failed to make any of the regular payments, no legal restriction stops you from controlling the property. However, full possession of the property may be restricted by the court, depending on the terms of contract you signed with the bank. Also, to avoid defaulting on payments, you will still have to make the regular payments as the bank makes efforts to replace the title deed.

Legal Right to Redeem Property

If you use you title deed as security to borrow a loan from the bank, but the bank loses your title deed, you still have the right to sell the property that the title deed covers. This way you can obtain the money to clear the loan even if the date set by the bank passes. In this case, the equity of redemption recognizes that you can buy or sell the property even if the bank is in custody of your title deed. Once you have cleared the loan, you have the right to demand that the bank issues an abstract or legal document that shows they no longer have any rights over the property, in case they are still in the process of replacing the lost title deed.

About the Author

David Shoo has professionally been writing since 2005. His articles have been featured in the UNICEF (Sierra Leone) and BBC online publications. David holds a Master of Arts in international journalism from the University of Westminster, UK.