Leasehold property

[lucas161212]

We love a house which is leasehold and apparently the leaseholder has died. It was SSTC but the buyers have pulled out because of this.

Why would this be a big deal enough for the buyers to pull out? What are the implications of this? Obviously we could buy the leasehold so it's freehold but how can we when the persons died? Would this be £££? The EA said it's 199 year lease and house is 1930's. apparently the current holders have never paid towards the leasehold.

Should we ask the current owners to buy it before we go ahead with the purchase? This is what happened with our previous house when we sold it. Will it be a problem when we go to sell?

Has the leaseholder only recently died? If so, the property cannot be sold until the Grant of Probate has been issued to the person(s) named in the Will. Then they can sell as Executors. Probate can take around 3 months but in more complicated cases, can take a lot longer.

There has been quite a lot of negative publicity recently about leasehold property and people have been put off.

The issue is (mainly) with new(er) properties which are sold as leasehold and the developer then sells the freehold. Leaseholders then find the cost of buying the freehold can be £10,000 or £20,000 when they expected it to be £2,000 or £3,000.

Also, as a leaseholder you have to pay ground rent. Some new leases have clauses within them allowing ground rent to be increased - there was an article about a case the other day where the ground rent doubled every 10 years. The effect that it would be £60k per year in 50 years or something.

BUT - 1930s leasehold properties aren't usually affected (so for instance we have a 999 year lease and ground rent can only ever be £4 a year). You need your solicitor to check the position carefully. Ordinarily, your solicitor should ensure that the ground rent is brought up to date as a condition of the sale.

Do you maen the freeholder has died?

Sorry to be clear

Do you meanit is a leasehold house where the freeholder has recently died?

Thanks for the info. That's very interesting, I wasn't aware of that clause so will definitely check that out.

Yes, will definitely speak to a solicitor and at the very least get the current owner to pay any arrears.

Would it be unreadable to ask the owner to buy the leasehold so it's freehold and then obviously goes into our name when we own it? Or get the cost off the purchase price?

If you don't buy the leasehold you are merely buying the freehold and the right to collect whatever ground rent the lease says... the leaseholder would have a right to live there until 2129 not you

In terms of terminology, you are buying a leasehold property and would own the leasehold anyway. What you're looking to buy from current freeholder is the freehold.

You need to do some reason on this - ordinarily you can't start the process until you've owned the leasehold for 2 years so if its important to you, then you need to ask the current owner (or his representives under the will). But that will involve a cost, plus legal fees so they may not be willing to do it, and they might want you to reimburse them because its for your benefit. You need to speak to the EA and your solicitor.

Research - not reason.

Sorry yes. The freeholder has died. The house is leasehold.

Do you have access to the family/ beneficiaries of the deceased freeholder?

OP, the freehold might not be for sale regardless of whether the freeholder is alive or dead.

If it is important to you to have a freehold house then you need to either (a) find out if the freehold is for sale and if it is look in to the best way to purchase it or (b) buy a different house.

Alternatively you could establish the terms of the lease to assess whether these are agreeable to you. If the lease is long and the ground rent low then you might decide it is ok.

I had this on my house seller purchased an indemnity ... in the end a company bought/found the freehold rights and restarted the charge. It was a whole 1.75 a year (peppercorn) so total non issue..

Look a bit into it before writing it off

Update- so according to the EA the sellers solicitor has looked into it and can't find who owns the leasehold. The sellers are going to take indemnity insurance out as they have put a conservatory on without permission. Then I assume it would be put into our name if we brought it?. We would need them to get insurance to cover all aspects of building and we would want to put a back and side extension on plus a possible loft conversion.

EA said lease is 1999 years long and it's a 1930s house. He said sellers have never paid ground rent but when they brought it the sellers paid up to date. Apparently freeholder can only claim it for previous six years and it's £45 a year. EA said sellers would pay this up to date but if they don't know who it belongs to how can they pay it?

He also said the bad press about bad leasehold properties are for new builds mostly and explained how and why.

Any implications you can see in this arrangement? Sound ok?

I think your terminology is wrong: it's the freeholder who can't be found

As wowfudge says and as I said in previous post, the sellers are currently the leaseholders. You would buy the leasehold.

They apparently can't find the freeholder. They should have paid the freeholder the ground rent since they purchased - if it was Up to date when the sellers bought It, who were their sellers paying? There may be details with the house deeds etc.

Also, I'd be surprised if it is a 1999 year lease- most 1930s (here at least) are 999 years.

The indemnity policy needs to be in your name so you need to check. This is all part and parcel of what your solicitor should be advising you on. The indemnity policy (usually) only protects you for costs etc of the local authority take action as a result of works being done without permission. It doesn't protect you for anything else.