Absentee Freeholder

Ian_W

Hi,
Thanks for offering to answer legal property questions and sorry it's a bit longwinded.

We've come across a holiday cottage we wish to buy [private sale] and agreed a price with the owners. The tenure is leasehold with 42yrs remaining on a 199yr peppercorn lease and an absentee freeholder, apparently long lost. Vendors have owned for 8yrs and took an indemnity against the freeholder turning up when they bought. They've only recently become aware of the changes in 2002 but have had a valuation for buying the freehold at £30K, though with an absentee freeholder it's questionable whether it will ever be paid. After contacting a conveyancing lawyer I've told them they must extend the l/h or purchase the f/h before we'll purchase and they appear willing to do this.

My research on t'internet [a little learning and all that?] suggests they have to get the County Court to issue a Vesting Order on proof of 2+yrs ownership, qualifying long l/h and absentee landlord. The matter will then be refered to the Leasehold Valuation Tribunal to decide quantum and this will be an independent decision, not based on their valuation.

My questions are:
1. Is my understanding of the procedure correct and, given their willingness to do this, any idea how long it should take?
2. Will the sum for either l/h ext or f/h purchase be shown as a charge or caution at the land registry and how long will it last?
3. Will we be able to get indemnity against the f/her coming out of the mists of time and what sort of ballpark cost would it be for £30K?
4. If extension is granted or freehold purchased in this way, is it likely to adversely affect future saleability or would it be considered good title?

Many thanks once again.

RiskAdverse100

1. Your understanding of the position is about right. It is going to take months to deal with though! (and this is assuming that the freeholder really is untraceable)
2. In essence the court steps into the shoes of the freeholder and sells the freehold or grants a lease extension for him. The money paid is then held by the court until such time as the freeholder materialises (if ever!). This means that title to the property will not contain any restrictions or other nasty entries.
3. No indemnity will be needed. The freeholder's money will be with the court should he ever turn up and claim it.
4. Nothing will affect future saleability.

The problem the sellers will have is proving to the court they they have taken all reasonable steps to try and locate the freeholder but without success. In this day and age if someone is still around then it isn't really hard to find them. Simply writing to the freeholder at his last known address without getting a reply is not good enough.

If a genuine attempt to locate the freeholder is successful then the sellers will have to use the statutory procedures available to force either the freehold to be sold or a lease extension granted and if you have a difficult freeholder then this can be a very time consuming procedure.

I agree that all this should be sorted out before you buy. Either way you could be in a for a long wait!

RiskAdverse100

Ian_W

Thanks very much for the helpful reply RiskAdverse.

I wasn't aware the money had to be paid into Court, hence I thought there may be a charge or caution against the property for if the freeholder did turn up one day. Not sure the seller is aware either so that may change their atttude, but if they want to sell at anything like market value I guess it's something they are going to have to tackle.

I'm a bit surprised that the court will need a lot of convincing that the freeholder is truely absent given that the 2002 Act was supposed to make this situation easier to deal with [e.g. reducing the court level] and the money being paid into court meaning there is no real gain for the leaseholder or loss to the f/her, other than perhaps the right to negotiate and be awkward!! The original freeholder from the 1840's is likely to be a near neighbour in the Churchyard but it did strike me that whilst his sons and heirs might not be too @rsed about collecting their annual peppercorn, £30K for the f/h or maybe £10-15 for a l/h extension might have them "crawling out the woodwork"!!

Thanks once again for the advice, given it's a holiday home we're after then we probably are prepared to wait unless something better comes along in the meantime.