absent freeholder advice needed

[lazysummer]

What are the legal and practical implications of buying a leasehold property, where the freeholder is not contactable? Is it a major or minor issue?

Major. I have done this. One building split into 3 freeholds. 2 freeholders missing and the lease ticking down. I bought the flat as leasehold regardless. Took nearly 3 years. Had to hire private detectives to track them down. One refused to acknowledge their connection to the freehold (we suspect they feared old debt). The others we found easily enough. Had to go the leasehold tribunal get the freehold valued, and then stumped up £20k for the freehold plus about £6k in legal fees. I was lucky. Flat was in a part of london where post olympic prices went mental so made investment back and more. Also one of the leaseholders of the flats chose not to come on board with us. She then had to pay us freeholders loads to extend her lease.
It worked out for me, but it was largely dumb luck. I would not do it again, too risky and costly. The system sucks and should be abolished.

Thank you. I'm glad it worked out for you. It must have an impact on the price and marketability of the property.

Absolutely, people know a bit more now about the issues of leasehold properties, freehold is more attractive.

Daughter's mortgage was turned down last minute purely because of an absentee freeholder. So yes, it can be a major issue, but I guess a lot will depend on the lender and how cautious they are. At the time, they were apparently looking for any reason NOT to,lend.

We were going halves with her on the purchase, and instead ended up buying the whole thing.
Our freeholder was not actually absent, merely hiding a few miles away under another name, presumably because of debts attached to the FH. But I didn't find this out (used a tracing service) until after we'd completed. The solicitor we used had advised us very late in the day not to go through with the purchase, because of the FHolder problem.
However we went ahead, planning to buy the FH later, which we did.

The property is one of 2 maisonettes. The owner of the other decided to sell while we were still going through the process of buying the FH. Her buyer needed to know the freeholder situation - presumably for their lender - and all we could say was that it was going through the court system, which seemed to satisfy them.

If you have a truly absentee freeholder, then the price of the freehold will be worked out by a formula, and then go through due tribunal and. court process. It's actually fairly straightforward though can take quite a while.
Our problem was that although we'd traced our freeholder, nobody at the address admitted to having heard of Mr X, but up he popped as soon as he realised there might be money in it, and tried to wangle more. He didn't succeed, but we did have to pay some arrears of ground rent, which he hadn't bothered to claim for some years from the previous owner.

Should have added, if you should buy a property like this, then IMO it's necessary to work out whether you can also afford to buy the FH, since an absentee Fholder could cause problems if you later want to sell. Also, it adds some value.
You can find how to work out the cost (plus solicitor's fees) via google.

Formula takes into account value of property, current length of lease and ground rent.
Our 'absentee' Fholder sent someone to value the place just after we'd spent a lot of money doing it up - it was a complete dump before. However it didn't make a big difference to the final figure.
We used a specialist solicitor for buying the FH, , having gone with a high st. one first, who said he understood it, but turned out to be useless.

I bought a flat with an absentee freeholder before the 2008 crash. I eventually managed to work with the one other leaseholder in the building (it was divided into two flats only) to get the freehold. There is a court process and it took the best time part of two years (my solicitors were slow, but there aren't that many who know the process.) The flat was essentially unmortgageable and unsaleable during this time, and it was undoubtedly one of the most stressful things that has even happened to me. Only buy a place with an absentee freeholder at a huge discount. Find out whether any mortgage company will lend on it before you spend any money on the buying process.

Given that there is a process for buying the freehold (worked out with a formula - the money gets paid into court and if the freeholder ever turns up, they get it), ask why they haven't done it. Most of the leaseholders need to agree, and be prepared and able to spend quite a chunk of money. It's a gamble - and in my case it paid off. If I could undo the "gain" to not have gone through the stress, I would do.

Thank you. The vendors have been open about the situation, but it does look like a lot of stress and money involved.