Freehold house on leasehold land? Is that possible?

[Hey12345]

We are in the middle of purchasing a property that was advertised as freehold. Months down the line with things progressing, the land registry checks came back and the land which the house is built on has 2 separate leases, for the same person, but at 2 different terms. One isn’t coming to an end for hundreds of years, but one is coming to an end in the next 80 or so years.
Our conveyancing solicitor said that there might not be any issues from this, it may have been forgotten about, or someone may claim the land and request rent for the land. He also said there is insurance to protect us from this but it might put people off buying if we were to sell.

I am meeting with him on Tuesday to go over everything before we exchange on the sale. But I’m wondering if any of you have any experience of this? Is it possible for a property to be freehold on leasehold land? My understanding that the property is therefore leasehold too?

And, any other advice like would you go for it or stay clear? It will be our potential forever home but I don’t want my daughters to have any issues if they want to sell
once my husband and I are gone!

Isn't the standard procedure to get the vendor to extend the lease before they sell on to you. Make it their problem.

one [lease] is coming to an end in the next 80 or so years.
I presume you know that this is a major red flag.

Article from MSE. MSE

Don't go ahead. There are other houses. Your solicitor sounds like they haven't a clue which is worrying. I am a solicitor albeit not a property one and even I know this will end up to be a real problem!

No. The property is either leasehold or freehold. The property you are buying is leasehold, based on what you have said, incorrectly advertised. Ie, you own the property, someone else owns the land.
That there are two separate leases and one is short-dated is an added complexity. I agree with PP - walk away.

You cannot have a freehold house on Leasehold land. You need clarity from your solicitor. Also, your lenders, if any, should be told the position if you are even thinking of proceeding.

Thanks for the advice. I have certainly been thinking of plan b. Unfortunately there aren’t many properties for sale in the area (very rural), and we have considered other areas. But I am not prepared to make a huge mistake like this!

Sounds complicated. It's not a freehold.

I won't buy it unless you can buy both leases on the land.

But I am not prepared to make a huge mistake like this!
Excellent news. Don't let heart rule head.
You may have the decision taken out of your hands, anyway, if you are getting a mortgage on it.

Freehold/leasehold isn’t actually uncommon - sometimes when the leaseholder buys the freehold they retain the original lease or leases in this case.

But it’s not clear in this case if the person who owns the leases is the one selling the property - or was a previous owner who bought the freehold and didn’t regularise the freehold/leasehold status.

Is the implication is that you would be owning the leasehold and the freehold? Perhaps not if the conveyancer thinks someone might claim it?

Bottom line is - if you will be owning both tenures and they will be merged on purchase that’s ok. If not - well you need urgent clarification.

Btw it may be that the titles haven’t been merged thus far because there are leasehold rights that we not on the freehold title but are still required eg access.

Please get a different solicitor.

A little more information, in case someone has anything else to say/suggest.

The 1000 year lease dates back to 1860 and then the 300 years in 1875. So my original sum of 80 years left on one is incorrect. But still not far from 80 years I suppose!

The property wasn’t built until 1980, and since then has been on the market and sold twice. We would, or should have been, the third lot of buyers. But now of course I am put off.

The estate agents advertised the property as freehold so after my meeting with the solicitor on Tuesday I will be paying a visit to the estate agents to say that I’m not going to carry on with the sale and explain how annoyed I am for making a bit of a financial loss in surveyor’s fees and conveyancing fees not knowing (until now when the checks came back), that it’s actually not freehold like they’ve said!

I think your next potential issue might be your lender (assuming you have one?) they don’t like leases close to their usual cut-off funding point of 72 years remaining.

Honestly? Sounds like a PITA. Definitely agree to walk away. And 💯 change your solicitor. I don’t see how a house built on land which does not transfer into your name along with the building itself without you having to register your interest in a lease be described as anything other than leasehold?

It might not seem likely at this point in time, but there will be other (less complicated) houses which come along.

That's sound well dodgy

Are you sure it's not a "fleecehold" ? What your solicitor is saying doesn't quite make sense. Avoid if it is.
https://en.m.wikipedia.org/wiki/Fleecehold

The estate agents advertised the property as freehold so after my meeting with the solicitor on Tuesday I will be paying a visit to the estate agents to say that I’m not going to carry on with the sale and explain how annoyed I am for making a bit of a financial loss in surveyor’s fees and conveyancing fees not knowing (until now when the checks came back), that it’s actually not freehold like they’ve said!
I believe that it is against the law to misrepresent a property (although I can't find the legislation to quote. It might be The Consumer Protection from Unfair Trading Regulations 2008. Anybody know?). You could try asking for some compensation with the threat of going down the official complaint route (i.e. dobbing them in to their regulatory body).
Take screenshots of the offending advertisement before raising a rumpus.

@senua thank you. I definitely plan on trying to get some compensation because we’ve obviously gone into some financial loss with surveyor and conveyancing fees. I’ve just been looking at the seller’s property questionnaire and he has ticked off that the seller owns the boundary to the left, right, front and back, but surely this can’t be right if there is a lease on the land?

I’m waiting in anticipation to see my solicitor tomorrow! At least I have time to write down as many questions as possible. He had asked about possessory title being updated to absolute title (which I think would have sorted out all this leasehold issue), but the seller has not answered that part. The sale is through probate so that just makes it a bit more difficult I suppose.

@senua thank you. I definitely plan on trying to get some compensation because we’ve obviously gone into some financial loss with surveyor and conveyancing fees. I’ve just been looking at the seller’s property questionnaire and he has ticked off that the seller owns the boundary to the left, right, front and back, but surely this can’t be right if there is a lease on the land?

I’m waiting in anticipation to see my solicitor tomorrow! At least I have time to write down as many questions as possible. He had asked about possessory title being updated to absolute title (which I think would have sorted out all this leasehold issue), but the seller has not answered that part. The sale is through probate so that just makes it a bit more difficult I suppose.

The sale is through probate so that just makes it a bit more difficult I suppose.
You need to have owned the property for two years before you can ask to extend the lease which is why I suggested getting the vendor to regularise the leasehold/freehold position.
I believe beneficiaries can 'inherit' this right. Another thing to check with your solicitor.

IANAL but With those dates I think it unlikely that anyone exists thinking they own the freehold to the land. Unless it is one of the old longstanding estates? Is there any indication as to who the freeholder is?

It may be that this can be sorted out.

OP do not take advice from people on here they really don’t know what they are talking about.

If it is the scenario that it looks like - a very old leasehold converted to a freehold but the titles never having been merged - it’s relatively common and easy to sort out. The solicitor advises the mortgage company that the title is freehold but they register the titles against both titles.

I had a similar situation but without the age aspects.

My solicitor sorted it out. I don't know how but it was done.

It's a nice house and I like it.

The solicitor advises the mortgage company that the title is freehold but they register the titles against both titles.

Sorry that should say register the mortgage against both titles.

So I have looked up the leaseholder, he was a politician who owned a castle as well as several plantations in Jamaica. I live in a rural area of North Wales and there are 2 known “estates” that own a lot of land and properties in the area, but this one I did not know about. It may be that the leasehold doesn’t mean anything these days since he did die in the late 1800’s. But it may be something that could potentially bite me in the a@!e!

My solicitor was more concerned of the potential struggle to sell later on, if we decided to, with a lease that was coming to an end.

I may be able to transfer the lease to freehold when I have been there for 12 years (?? Just what I have been looking up), but of course I don’t know anything about any legal aspect of all this so I’ll see what my solicitor says tomorrow.

It does seem like a difficult purchase. And the seller has already rejected a lower offer because of some issues we brought up after the survey so this extra issue is putting me off. But we’ll just wait and see what is said tomorrow. If I’m told the house should be worth less than what we’re paying because of the leasehold and the seller doesn’t go any lower then there is no doubt I will pull out.

Your solicitor sounds inexperienced - either the house is freehold and the lease has not be regularised or it’s not. The lease ending is irrelevant if it has already been converted to a freehold. The 19th century gentlemen was clearly the landowner who owned the freehold of the lease originally, he’s not a current owner of the lease.

So your solicitor needs to do some more research. (I also think you need to talk to another solicitor). He should be able to merge two leasehold/freehold titles on purchase. (As I said they’re sometimes retained is if there’s anything useful in the lease like a right of way that is not covered in the freehold - so they need to be read through carefully.)

What does the seller and the agent say?