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Property that is regustered as Good Leasehold, not freehold(6 Posts)
I'm on the verge of exchanging on a house purchase which had been due to go through any day this week. I've also given notice on my rental property where I live and am due to move out on the 23rd June.
Everything was sorted and my solicitor who has been hyper cautious thought it was OK to exchange this week. I am buying a new build which is built round the back of a street of Victorian terraces. She has been chasing the freehold documents for a couple of weeks now, but from what she had seen it all looked fine.
Now she has just come back to me and said:
'The title out of which the title to [new house] will be granted is registered with Good Leasehold title. This means that when the title was registered, the registrar was only satisfied as to the Leasehold title meaning that evidence of the freehold reversion was not given to the registrar.
Unfortunately some Mortgage Lenders regard Good Leasehold title as being unsatisfactory and will not lend in relation to this class of title. It may also be difficult to sell on.'
Should I be worried or is this a relatively minor glitch that can be sorted with a bit of paperwork? Also, should I go begging to my current landlord and letting agent and ask to cancel my notice? I'm not sure how feasible that is as they are already showing the house to potential tenants.
Not trying to be unhelpful, but the best person to ask is surely your solicitor.
Sounds to me like she considers it a potential problem, so you need to check whether she's yet raised it with the lender (she probably has) to check whether the offer is still on.
think it's quite a common form of leasehold but am no expert. our house has this though. the previous owners paid for insurance in case any relatives of long dead owners turn up one day with a claim - pretty unlikely touch wood! we've never had any problems with mortgages but have needed to provide the insurance certificate. would think your solicitor could advise more though tbh
Not sure why your solicitor has only just woken up to this.
In my experience, there are few problems in practice with good leasehold title. It means superior title was not deduced to Land Registry at time of registration of landlord's title, or there was no consent from the superior landlord to the lease or from their mortgagee.
There may well be a good chance of getting the title upgraded at the Land Registry, particularly if the superior title is registered. And, in most cases, the property should still be mortgageable, although the mortgage company may require an indemnity/insurance policy put in place (I'm long in the tooth, but this used to be quite straight forward and a couple of hundred quid) or for evidence of the superior title.
I'd ask your solicitor what he/she proposes to do to fix it. They should really be offering you solutions, not problems.
Thanks, I thought it was strange that they'd only picked up on this on the verge of exchanging. To be fair, she had been chasing the vendor's solicitors for weeks for evidence of the freehold. I don't really undestand why the vendor's solicitor hadn't sorted it out with the vendor sooner. He's had the land for two years whilst he built the property so should have got it sorted ages ago.
With your help and a bit of googling, I've become marginally less stressed about it. The vendor has agreed to pay for the indemnity policy which I understand only costs £65 and lasts for ever. She has chased my mortgage company to see if they are willing to accept it.
I'm mainly worried about the mortgage company now not being willing to lend. They were really sticky about approving the mortgage even though they pre-approved me immediately, I'm an existing customer and it's only 55% LTV. No wonder mortgage lending is low at the moment, it took ages and they asked for crazy amounts of evidence.
It seems unusual to have a leasehold house doesn't it? Be that as it may, perhaps you could apply to purchase the freehold.... just thinking out loud.
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