What Are Crossover Leases?

tom0407

Hi,

We're considering buying a place (yes we must be crazy at the moment I know but that's a another thread), and it's got a crossover lease. A bit of Googling turned up this page which looks informative, but can anyone tell me anything else about it? The flat we're looking at is a maisonette with one flat above. (It's a house that's been split).

http://www.propertyinvestmentproject.co.uk/blog/2007/10/25/crossover-leases/

Thanks,
Tom

Richard_Webster

Basically these are normally OK - the page referred to is reasonably accurate. In fact most major lenders will accept them - see Council of Mortgage Lenders' handbook - http://www.cml.org.uk/handbook/frontpage.aspx. Select England & Wales for "Select Handbook" and then select your lender and then hit "Print Parts 1 & 2". It doesn't actually print but provides printable format. Then see what they say for 5.5.4.2. The answer in the second paragraph is "Part 2"

E.g. Chelsea Building Society:
5.5.4.2 one of two leasehold flats in a building where the borrower also owns the freehold reversion of the other flat and the other leaseholder owns the freehold reversion in the borrower's flat; check part 2 to see if we will accept it as security and if so, what our requirements will be.

5.5.4.2- Do you lend in these circumstances?
Yes. Under the terms of our mortgage our security extends to include any interest the borrower may hold or acquire in the freehold.


It is not a problem to have a mortgage on both leasehold of your flat and freehold of the other flat. A few of the less well known ones may cause problems and HSBC/FirstDirect don't subscribe to the CML Handbook so their attitude is unpredictable.

The scheme is sometimes called the Tyneside Flats Scheme as there apparently a lot in that area. Laing Homes used the scheme for their maisonettes.

There should be a restriction on the registers preventing the sale of the lease of one flat separately from the the sale of the freehold of the other flat and the leases should contain appropriate wording to make covenants etc enforceable.

tom0407

Thanks very much that's very helpful. My mortgage is with Alliance and Leicester, and from what I can make out they are ok with this arrangement.

5.5.4.2- Do you lend in these circumstances?

Yes, provided that the conveyancer complies with Section 5.5 of Part 1 of the Lender's Handbook. Please also refer to Section 5.10 for our requirements in respect of leasehold securities.

Richard_Webster

Should therefore be OK but solicitors will need to check the leases.