Leasehold confusion

[ashrobbo]

Hi All,

Before anybody mentioned - I am seeking solicitor advise but wanted some other opinions.

We are looking to purchase a house, it turns out said house is actually a leasehold... however its a 999 year lease from 1938.

900 odd years left on the lease. Ground rent is £4 per year. Current and previous owners have never been cable to contact the freeholders (i have the lease document with the two guys names on). APparantely they died and didnt have any heir's, they dont even collect the £4 peppercorn rent and its never been paid to the estate agents knowledge.

The house has been previously extended (kitchen extension, garage converted, room above garage added).

Alarm bells ringing that these changes have happened and the freeholder hasn't been made aware.

We've asked them to take out indemnity insurance as part of the sale process so if anybody comes knocking about the extensions its all covered, we do want to buy the leasehold but i understand this is a long complex process - unsure of what the process or costs are - anybody gone through this?

so my queries

- likely cost?
- whats process to buy freehold?
- should i worry about anything else, we want to make internl changes to the house, is this affected by a leasehold?

Its a house not a flat which is why i found it unusual.


thoughts appreciated!

Ash

 

[muon]

I have no knowledge at all on something like this. I would wonder though

- how can you buy the lease if the freeholder can't be contacted?
- what happens if the freeholder finds out?

 

[Shoza]

You will likely want:

Absent landlord indemnity insurance - £100~
Breach of covenant indemnity insurance - £50~

Purchase freehold would take 12 years - adversely possess the freehold and hold it for 12 years and then make an application to turn this into an absolute freehold title (you'd then own the freehold outright and no one could claim it).

I personally wouldn't' worry if the freeholder is absent but get the insurance to cover any hiccups - it's mostly useless but the seller pays for it and why not? Your mortgage company might insist anyway.

Aside from the absent landlord consent check that the works had planning and building regulations approval where necessary.

 

[ashrobbo]

You will likely want:

Absent landlord indemnity insurance - £100~
Breach of covenant indemnity insurance - £50~

Purchase freehold would take 12 years - adversely possess the freehold and hold it for 12 years and then make an application to turn this into an absolute freehold title (you'd then own the freehold outright and no one could claim it).

I personally wouldn't' worry if the freeholder is absent but get the insurance to cover any hiccups - it's mostly useless but the seller pays for it and why not? Your mortgage company might insist anyway.

Aside from the absent landlord consent check that the works had planning and building regulations approval where necessary.

So I would need to wait 12 years for this to actually be mine?

How would i check works had building planning if the current seller wasn't living there when the work was done - can this info be requested online?

Surveyor going in today so hopefully this will highlight any issues structurally.

 

[a1ex2001]

I wouldn't worry about the lease too much your not going to be around in 900 years and there is a good chance the house won't be either. We have never paid our ground rent similar length lease as the leaseholder is unknown we had the insurance sorted when we purchased the property.

Local council should be able to tell you if planning/building control was sort but this should be don to the vendour and their solicitor to sort not you.

Buying the lease should you wish is a fun game with no contactable lease holder you can go through a process where the state effectively sets the value and you buy it from them I have thought about it from time to time but it really doesn't help that 99% of the information on leaseholds is based on the ridiculous situation with London flats!

 

[Skillmister]

I did recently deal with a flat sale where the seller had set up a Right to Manage company as the freeholder was in mental care and all relatives told them to 'do one' when asked about buying the freehold, making alterations or any management issues etc.

Don't really know a massive amount about the process and whether it's a) available for houses and b) would make the process of buying the freehold any easier but maybe something to look at? http://www.lease-advice.org/publications/documents/document.asp?item=21

 

[ashrobbo]

Thanks for the input guys. I spoke to solicitor yesterday who basically confirmed

- absent landlord indemnity covers any unpaid ground rent
- breach of covenant indemnity will cover extensions

With absent landlord she's never heard of them returning but as long as contact is attempted you can do what you want internally and externally as long as it meets planning approval and building regs.

My mind is certainly at ease, we might Perdue the freehold thing in a few years before we decide to sell just for ease of sale but might not we will see