Buying Freehold

[readysaltedplease]

Received a letter today from our freeholder offering us, and our upstairs neighbour to purchase the freehold.

Our flat is currently on the market so our initial reaction is we wouldn't get the money spent on purchasing the freehold back as part of the sale so a bit pointless.

However does anyone know, if we both declined to purchase the freehold and they sold it to someone else, could the new owner alter the lease at all?

Ours is a bit unusual that although the property is leasehold we don't have any service charges or ground rent, we just pay a yearly amount for insurance to the freeholder which is one of our key selling points so it could potentially affect a sale if charges were imposed.

Thank you in advance

Solicitor wants to charge me £85 to check if they have the lease or not and been on hold to the mortgage company for an hour and no answer ☹️

@readysaltedplease

Solicitor wants to charge me £85 to check if they have the lease or not and been on hold to the mortgage company for an hour and no answer ☹️

I would be saying I will pay it if you have it (just because it could cause you so many issues with selling, especially if not registered at the LR), but if you don't have it and as you were possibly negligent by not showing or giving me a copy of the lease I will not pay it under those circumstances.

@ramblingsonthego will give that a go thank you

I've found out that there is an indemnity policy in place, we bought the property from FIL and he paid to have the policy when he sold to us. We don't have a record of that so i think that's what i need from the solicitor rather than a potentially non existent lease.
So I'm hoping the fact nobody has a copy of the lease that would put any potential purchasers off buying the freehold and nothing financially will change!

Have you not asked your freeholder if they have a copy of your lease? We hold all leases for the properties.

Even with an indemnity, it will still put some buyers off. Most indemnity policies are pointless and have so many get out clauses.

Personally I think you need to do all you can to find the lease, be that solicitor or freeholder and if not ask your solicitor what you can do. You could apply to the freeholder for a lease extension as a way of getting the lease or a new lease assigned, but as you have only owned the property for a year it would need to be an informal lease extension which the freeholder could name his price. For a statutory lease extension you need to have owned the property for 2 full years.

Do you know how long is left on your lease?

Also have you asked your neighbour if they have a cope of the lease? Most are the same (all of ours are exactly the same), and so it at lease gives a purchaser something to work from, and for you not to get any nasty shocks!

You get some freeholders who will enforce strictly any and all clauses (we let some go like drying washing outside in the back garden) but if its sold on, legally they can enforce all breaches of lease and they could go down the forfeiture route if you and neighbour do not comply.

Buy the freehold.

@readysaltedplease no one sensible would be a leasehold flat without seeing the freehold lease. That would be madness and pure financial mistake! Sorry but that's massive wishful thinking on your part. Also who owns the freehold, your FIL?

@ramblingsonthego
Spoke to mortgage lender today they confirmed no lease with them just an indemnity policy
Solicitor was less than useless telling me i still need to pay £85 for the lease, i said if you can confirm you have one then i will pay, he said check the land registry.. i said you sent me a letter telling me there was no copy with the land registry! I've asked him how to obtain a new lease but he hasn't come back to me.
Tried calling the Freeholder today, their number is no longer in service, tried calling the estate agent that sent the letter about buying the freehold they didn't answer all day.
There is 94 years on our lease left and 50 years on upstairs neighbour's. He does have have a copy of his lease yes so will ask to check that to check for clauses in the mean time.

Thank you very much for all your advice so far i really appreciate it

@FluffySunshineBunny the flat has been sold at least twice prior to FIL buying it so either everyone is not sensible like you suggest or there is some sort of legal document somewhere that is acceptable bar the lease.
No FIL is not the Freeholder

Wow if your neighbour only has 50 years left on his lease how much is the freehold for sale for? Depending on the price of the flat it could be quite expensive given the short length of his lease. It would really be worth his while to buy the freehold with you and save himself a fortune!

I would get a price from the freeholder and see what they are offering, and also get a photocopy of your neighbours lease as it is highly likely your lease was identical.

[quote readysaltedplease]@FluffySunshineBunny the flat has been sold at least twice prior to FIL buying it so either everyone is not sensible like you suggest or there is some sort of legal document somewhere that is acceptable bar the lease.
No FIL is not the Freeholder [/quote]
Fair enough but the shorter the lease years the more of an issue this could become.

I'm risk averse when it comes to legal issues and have seen some pretty shocking things when it comes to leases, so I accept I may be over cautious.

Personally I would get a copy of the freehold lease ASAP. It won't be the same as your neighbours as there are different years remaining which means either your lease years remaining are wrong or someone at some point got a lease extension. That's worth knowing.

I would also be getting in touch with solicitors again and telling them you are going to report them for negligence to the the solicitors regulation authority. They did not to their job correctly if they did not get a copy of the freehold lease for you to review. I would not be paying £85!

fluffy what do you mean by the freehold lease? Do you mean the long lease that the freeholder provides to the leaseholder? This is just called the lease. Not a freehold lease.

The freeholder is the one who owns the land and building. The freeholder grants a lease for xxx number of years to a leaseholder. Even if the same person owns the freehold and a leasehold they are still separate entities. You cannot be a leaseholder and freeholder at exactly the same moment in time by law. I normally use an example of hats. So currently we are selling our property. For this we have our leaseholders hat on and we start the process. We have offered our buyer a leasehold extension so I then put our freeholders hat on and grant that extension to the leaseholder. No leaseholder will own a freehold lease. They may own a share of the freehold but this is different to the leases.

That freehold will sell. With one of the leaseholders having only 50 years left on his lease, it's a good investment. Any lease below 80 years equals extra money to the freeholder when they renew it. Look at a lease calculator online to see how much it would pay the freeholder if that were to happen.

How do you know there's 94 years left on your lease? Where did that information come from?

@FluffySunshineBunny the solicitor wasn't negligent. An indemnity policy is accepted by most lenders.

How much is the freehold to buy?

The freehold is £19k to buy and we have until 20th November to decide.

The lease was extended just prior to FIL buying it so we know there is 94 years left on it

Assuming all avenues were explored at time of FIL and our purchases and a lease could not be located hence why the indemnity policy is in place, how would the Freeholder be able to sell as surely any potential buyer would want to see what they were buying?

I don't understand. When the lease was extended just before your FIL bought it, the solicitor of both the leaseholder and the freeholder will have had a copy of the lease surely? How did your FIL not get a copy?

@ScribblingMilly that's a good point actually, i know it was the owner FIL purchased from that had the lease extended so I will try and speak to FIL's solicitor tomorrow and see if they have a copy although that was 6 years ago.

I assume it's physically impossible to have the lease extended without having a copy of it?

I can't get hold of the Freeholder to ask if they have it, the number on their website is no longer in service, FB page hasn't been used for 2 years either. Will try the estate agent that sent the letter about purchasing the freehold again tomorrow but their phone has just rung and rung every time I've tried it today

Yes, you use the existing lease when you extend it. Or draw up a new one.

@ScribblingMilly thank you very much will get onto them tomorrow

Tried the agent that sent us the letter about buying the freehold again, no answer and google says this 🤷🏻‍♀️

That's worrying. So you have an address for him but it's via an invalid business. Maybe it's time to get a decent solicitor on to this situation, or you could get free advice via lease-advice.org initially - you can book a telephone consultation with a solicitor for free.

I'm puzzled about your FIL's role but maybe I've misunderstood. How did the situation go from him buying a flat with a newly extended lease to selling it to you less than six years later with no lease?

Thanks for the link will check that out.

Spoke to FIL this morning and asked him to check all his paperwork again to see if there is any correspondence regarding the lease. He's also given me the contact details of the solicitor he used when purchasing. Tried to call them this morning but they're not open until Monday.

FIL purchased the flat for OH when he was going through divorce but OH has always lived here and paid the mortgage amount to FIL. Once the divorce was finalised (took 4.5 years!) we were then able to purchase from FIL.

Still doesn't answer the question about where the lease has gone but I'm working on it.

Let us know how you get on on Monday. I hope with some steady detective work you will find out what's gone wrong.

Your neighbour has his head in the sand however, and really should be looking at buying the freehold - paying the lion's share if you do it together. He may think he never wants to move but life is unpredictable and his lease is too low for him to sell his flat - and every year it will get more expensive to extend it.