Flying Freehold on a Leasehold house?? HELP?!!

steelercaz13

Hi all

Utterly befuddled by a couple of conversations I've just had. Basically we put in an offer on a house this morning, which the sale of to someone else had just fallen through over the weekend. It is a repossessed property, which needs absolutely gutting, so is already very 'cheap' (by todays standards!).

We viewed the terraced house last week, and it has quite a complicated setup: you walk into the house at street level from the road which gives the house it's address. On that floor you have kitchen and living room, and then upstairs you have 2 bedrooms and a bathroom. However, it's downstairs from the main entrance that things get confusing!

Hard to describe, so bear with me, but you basically go down a staircase from in between the kitchen and living room to a small cellar-like area, which fully belongs to the property (in the brochure it's called a store room, and we would basically put our washer and drier in there). Then there is a lockable door down into a communal cellar, which the property shares with 2 other properties in the block. I had never come across a setup like this, so no experience with it at all.

I just got a call from my very stressed boyfriend, saying the estate agent had called to say that the reason the previous sale had fallen through was because with the cellar being underneath another property than the one in question, the property was 'flying leasehold', and that very few mortgage companies will mortgage these. As we were speaking I googled 'flying leasehold', to basically find it doesn't exist, so I called the agent myself. She explained that it is actually called a 'flying freehold', even though the property itself is leasehold - the lease is 999 years from 1992, and the annual 'rent' is £1 (according to the lease document in the Home Information Pack I just received). FYI, the property is referred to in all documents as a 'house', not a flat.

Looking at the plans in the HIP from the land registry, it says the "leasehold land" is the area outlined in red - which includes the whole property, including the bit of cellar which is under the neighbouring property, but not the communal cellar.

It then adds 2 notes - "as to the part tinted pink only the cellar, ground & first floors are included in the title" (there is a flat above the property, on the top floor), and then "as to the part tinted blue, only the cellar is included in the title" - and the bit tinted in blue is the what the agent is calling the storeroom, up to and including the locked door which enters the communal cellar. This blue section lies directly, and fully, underneath the house next door. (i.e., the property we are looking at is number 28, but the storeroom/cellar bit belonging to it lies under number 26.)

The communal cellar area, which the property shares with 2 other properties, is not outlined or shaded at all, and as such presumably is not part of the deeds/title...?

Still with me?!

So...firstly, it appears we have a 'flying freehold' issue with a leasehold property - is this possible/normal?!

Then, how likely is this to be problematic in getting the mortgage?? We are expecting a mortgage in principle tomorrow morning from Yorkshire Bank, but just based on the amount, not on the address. Is this likely to make them pull out when we tell them about it??

Finally, how can the cellar be communal, and as such part 'belonging to' the property in question, but not be shown on the deeds at all?

I am desperate for some guidance here, so all advice / thoughts appreciated!! Thanks in advance, you're all fab... ;-)

G_M

Banks lend on leasehold flats - I don't see a problem. But talk to the Yorkshire once you're sure what you talking about.

You need to check the lease carefully and the plans, to be absolutely sure what you are buying. Don't rely on the HIP. Talk to the vendors to clarify what they have access to and how the 'communal' bit works in practice. Check plans with the Land Registry (£3). OR get your solicitor to investigate.

princeofpounds

Normally when you have freehold you own a patch of land up to the sky (in a restricted sense) and down into the earth (again, in a restricted sense).

A flying freehold is where 'land' is not just divided in a 2D fashion on the ground, but there is a 3D component too - different titles to different floors.

It's not ridiculously rare, but it's uncommon and a bit more complicated to deal with, particularly if there are disputes or damages. Therefore many mortgage companies don't want the headache and won't lend on them.

steelercaz13

G_M wrote: »

You need to check the lease carefully and the plans, to be absolutely sure what you are buying. Don't rely on the HIP. Talk to the vendors to clarify what they have access to and how the 'communal' bit works in practice. Check plans with the Land Registry (£3). OR get your solicitor to investigate.

Hi both, thanks for your replies. Got a little further now: it is definitely a flying freehold, and the plans at the Land Registry confirm this. It is the entire small cellar/storeroom which is under next doors property. However, something giving me a tiny bit of optimism is that the freeholder of the property we are looking at is the same company as the one that owns the one next door, so from what I'm reading this is the most 'preferable' flying freehold situation, i.e. where the properties are leasehold, because it is much easier to resolve problems.

(I.e. if there is an issue, the landloard can force one set of leaseholders to do the work necessary to their house to protect that of the other leaseholder. Indeed, working my way through the lease itself (which I about half undersatnd so far!), this is all set down very concisely. )

Unfortunately the vendor knows nothing about the property, as it was repossessed due to bankruptcy. They can't even confirm if there is a parking space or not - it is not shown on the plans at the Land Registry, but is clearly diagrammed on the drawings in the lease itself, and referred to many times throughout the document. Should be fun for the solicitor! Who at least is a great friend of my BF, so will be really helpful...

The big irony so far? I did some digging, and the bank which currently owns the property, and is selling it through a solicitor and an estate agent, is the Clydesdale bank...........part of Yorkshire Bank, who we have applied to for a mortgage!! I can't decide if that's good news, because there's a precadent they will lend on this kind of property, in fact this very property, or bad because they might just want shut of it now???!!!

Richard_Webster

I think if you start trying to explain this kind of set up to your bank at this stage you will confuse them terribly. You must understand that people who deal with mortgage applications are not lawyers and can easily get things wrong and misunderstand what is happening. Better really to get your solicitor to explain it to them later on.