Leaseholds - help me understand please

[SalviaOfficinalis]

Looking to buy a house that is advertised as a Leasehold. Not a new build, built in 1960s.

On the land registry, there is an entry is listed as Freehold which includes all the properties on the road together in one entry.

I’ve downloaded the title register and all the properties are listed in there individually as Leases.

The entry date is 2010, and says the deeds have been lost or destroyed and the land is subject to anything imposed before 2010 if the deeds were found and could be enforced. (I’m paraphrasing).

I’ve only come across leaseholds for new builds and have heard horror stories of ground rent/charges etc escalating. The estate agent says there is no property management company and no fees.

My question is, can the freeholder impose fees/charges etc in the future? I don’t understand how it works. And am a little worried about these missing deeds too.

Should have added the lease is 999 years, stating in the 1960s

I am not a solicitor but have some experience of leaseholds. It does all sound rather puzzling but I can only assume it means the freehold deeds were missing/unregistered when the leases were registered in 2010 which would not be that unusual. Freeholds have only been compulsorily registered when they changed hands since 1990 I believe, so if the freehold hasn't changed hands since then no deeds would necessarily be on file at the land registry.

If you have a copy of the lease then it should name the freeholder. The freeholder would be entitled to charge ground rent as laid down in the original lease document (from 1960s). Ground rent is restricted for new leases but not on existing leases but I think there are now limits in place to restrict excessive increases. I doubt however this would be a major issue for a lease from 1960s.

As a leaseholder there is a right to buy the freehold so you might want to discuss that option with your solicitor. It is much easier to do this with a house than a flat as you don't need everyone else in the block to agree.

My question is, can the freeholder impose fees/charges etc in the future? I don’t understand how it works.
There is a contract (lease) between the freehold and the leaseholder. Both sides have to adhere to whatever that document says. Your solicitor can get hold of a copy and warn you of any onerous clauses.
Be wary if it seems like there may be huge expenses coming up and no money in the kitty: whoever currently holds the lease will be liable, you can't go back and chase previous leaseholders.

@senua I don’t see how there would be any expenses etc though. There are no communal areas etc like in new build estates. It’s just a road of semi detached houses. This is why I’m finding it a bit puzzling that it’s a leasehold in the first place.

Leasehold house - do not touch with a barge pole. I am a property lawyer.

You'll have trouble getting a mortgage and then trouble selling.

Walk away now

I believe there are many northern towns where the houses are leasehold. It was usually where the properties were built on land belonging to a landowner, so the house is yours but the land it sits on is not. It's not usually a problem where the length of the lease is 999 years. If you look at the lease, it will set out what the ground rent is and whether it increases at all. It may be that no ground is payable and it is, to all intents and purposes, a freehold property. If you can trace the freeholder, you may be able to buy the freehold, but where there are no communal areas or ground rent fees, it shouldn't cause you any problems if you cannot buy the freehold.

This is why I’m finding it a bit puzzling that it’s a leasehold in the first place.
Ground rent is a nice little regular, risk-free income so I could see why people set up leaseholds. They have only got a bad reputation in the last few years when greedy developers have put unfair clauses in.
In some parts (?the north west?) leaseholds are quite common, dating from Victorian times.

We have a leasehold property from the 1930s and this is our experience. Freeholder is ‘absent’, no rent has ever been charged, no communal grounds, and the lease is 999 years. The properties on our street have changed hands many, many times, no problems selling at all.

Leasehold house - do not touch with a barge pole. I am a property lawyer.
Why do you say that? MIL's house (semi) was leasehold. When she died, DH enforced the right to buy and sold it on as a freehold. It was a bit of a faff and paperwork but apart from that no problem.

Absolutely I can see the appeal of a freeholder charging ground rent, but the estate agent said there was no ground rent for this house.

(of course I’ll verify this properly later - haven’t even viewed the house yet).

It is in the North West actually!

Absolutely I can see the appeal of a freeholder charging ground rent, but the estate agent said there was no ground rent for this house.
Um <casts about for reasons >
When the freeholder set this up he was obviously thinking of his great great great great great ... great grandchildren taking the land back in 999 years time!

Should I still stay away to older leasehold house?

Found a property in a big estate (big developer, still exist now) which is leasehold, 999 years start from 1994, checked with both agent and developer that only have to pay ground rent £90 per year, but they don't answer if there is any terms for increase.

You can order copies of leases from the Land Registry, to check terms. It's only a few pounds.
lease-advice.org

Can i get all of the details including the terms for increase of ground rent? seems that this is setup by developer?

Can i get all of the details including the terms for increase of ground rent?
I should think so. A lease is a single, legal contract.
It's what your solicitor will order when s/he does the checks.

All of this is for your solicitors to sort out and to explain to you fully what the implications are. I always believe in using an actual solicitor we have recently sold and bought and we spent an hour in his office going over everything before we signed.

Don’t worry I will be using an actual solicitor 😁

Just wanted to get some advice so I could decide if it was worth viewing the property or if I should rule it out. Most grateful for those who have given advice.

The freeholder can only double the rent every 25 yrs and if the freeholder is missing and one turns up they can only clam back 6 years back rent.

you will in all probability be offered an indemnity policy which will cover any back claims and the total mortgage if the whole lot goes wrong later on.

Our 1970 house is £20 per year.

Utter bollocks. And if you're a property lawyer, I'm the Queen of Sheba.

Conveyancing solicitor here of more years than I care to remember! Where I practice long leasehold terraced houses (999 years) are very common. The ground rent tends to be only a few pounds and cannot increase( that is something that has only come in within the last decade on new builds).

The lease cannot be altered by the freeholder in the future without you agreeing. Once you’ve owned the property for two years you have the right to buy the freehold

In relation to the freehold, it sounds like the title was registered for the first time in 2010 on the basis of lost title deeds. In those cases the Land Registry will put an entry like in this case.

As to why they did it this way, your guess is as good as mine!

ChampagneCommunist · 12/08/2022 14:22
Leasehold house - do not touch with a barge pole. I am a property lawyer.
You'll have trouble getting a mortgage and then trouble selling.
Walk away now

And where do you practise....Mars ? Whole swathes of northern cities and towns are leasehold; usually 999 leases on peppercorn rents that can't be increased. I bought mine, neighbours didn't, makes no difference, sought after street, houses sell within days.

999 year leases

Thanks all for the advice.

Decided not to go for the house (very overpriced) but still useful to know as the whole area we’re looking at seem to be similarly leasehold and another house may come up in future.