Buying a house part freehold part leasehold - Advice please

sysadmin

Hi,

I've got a question, I'm in the very late stages of buying a house, we were told when we made the offer that the house was freehold. Well we got the contracts through over the weekend and its now clear that the house and the land which the house is built on is freehold but the access road behind the house is leasehold and there is an underlease on it.

The lease is something silly like £5 a year but my only concern is the fact that the lease expires in 2032, Now this house is where myself and GF are going to be spending a long time and we don't envisage moving again for a very long time so i want to know what could happen when the lease expires?

Could i be made to pay a lease of £1000 a year or something silly?

Any advice would be appreciated.

Richard_Webster

I get this a lot where I am but usually the leases have more like 900 years left! We have quite a lot of freeholds where we keep the lease technically alive simply to give rights to use the rear passageway.

You may have to take a chance over the matter and obtain an indemnity policy to cover the continued use once the lease expires.

Usually the problem is that original freeholder granted leases say in 1941 (I'm assuming 99 year lease) and kept freehold of passageway at the back. The freeholds then perhaps got sold off in lots and nobody remembered to include the passageway so by the time your sellers came to buy the freehold their seller didn't own the freehold of the passageway so could not give freehold rights over it, or he did own the freehold and nobody remembered to get rights over the passageway when the freehold was purchased.

Your solicitors could do a SIM search at the Land Registry to see if the freehold title to the passageway is registered and then the freeholder could be approached to grant perpetual rights to use it. You may find either that the freehold of the passageway is not registered or if registered, the freeholder is no longer at the address in question, or being a company, has been wound up. If the last then you possibly could try to obtain the rights from the Treasury Solicitor who looks after land belonging to wound up companies, but quite a bit of cost would be involved whatever you did.

sysadmin

The lease is currently unregistered.. here's the blurb in the letter from my solicitor.

* The leasehold property is presently unregistered but will be registered at H M Land Registry with absolute title upon completion of your purchase.

That means didly squat to me...
can anyone clarify?

The underlease started on 24th June 1933 for 99 years with a yearly rent of £5

TIA

Richard_Webster

So if leasehold title is unregistered (which isn't in itself a problem) has the solcitor told you that the freehold title is registered?

I am surprised that your solicitor has not explained the point to you in more detail. You might effectively have to go had with the purchase, because the hassle of doing something about the lease running out, may be too time consuming and expensive in the short term, but I would have expected the solicitor to have asked about acquiring freehold rights to the use of the passageway. Has he asked the seller's solcitor about this?

Basically, this is a case where you need to go back to your solcitor and get him to explain it further. Ask why nothing can be done about getting a right to use the access attached to the freehold title.

As I tried to explain in my previous post, it may be difficult to do much about it, but unless they investigate a bit they won't find out. You need to get them working on finding out who owns the freehold of the accessway.

sysadmin

Thanks Richard,
I have spoken with my solicitor. The freehold is registered and all fine. Apparently they don't know who the leasehold belongs too as the company / person on the lease documentation no longer exists.

She said that after the lease expired that the land would then become property of the freehold and every house on the street who backs onto the access road has their own part etc.. She said that it wouldn't be a problem

Conrad

Unless you are buying cash, I would imagine your lender may not want to entertain this uncertainty. Will depend on risk factors such as a long lost individual claiming ownership of the lease which may entitle them to certain rights which in turn may have some effect upon your enjoyment of the property, which could mean the lender less able to sell the property in the event of repossession.

I suggest this is fully addressed in writing prior to your exchanging contracts