Good Leasehold Title?

JustKeepSwimming_2

My aunt is hoping to bid on a leasehold house at auction tomorrow (wed 17th), but has had difficulty getting information from the seller's solicitor.

The house has a long lease (over 800 years left) but the house is only registered with good leasehold title & my aunt's solicitor says we need to take out an indemnity policy (approx. £150). She has already tried to find the freeholder via the seller's solicitor with a view to getting a copy of their title, but they have yet to reply, so we don't know if the freeholder is absent.

The seller's solicitor doesn't seem to be on the ball as they managed to put the title deeds for a completely different property into the legal pack, & now they are ignoring 'phone calls. My aunt's solicitor has also tried to find out if the ground rent has been paid by the current owner, but has yet to receive a reply.

I'm assuming that there is no onus on the seller's solicitor to provide this information before the auction tomorrow & it is a case of "buyer beware" but is this something my aunt should really worry about?

There was also an extension done in 1985 - planning permission was granted in 1985 for a new kitchen, bathroom and bedroom but no copy of the permission is enclosed with the auction pack, & there is no evidence whether building regulation approval was obtained.

Does this actually matter if the surveyor is happy with the actual structure & standard of the building work done?

Anyone have any thoughts? Thanks.

Richard_Webster

It is quite common for long leases of older houses to have good leasehold titles. This is because when the lease was first granted nobody bothered to keep certified copies of the freehold deeds to prove that the then lessor was entitled to grant the lease. It was no big deal in the past but now the Land Registry take the technical point that it is possible that the person who granted the lease (c1900?) didn't actually own the freehold at the time so they can't give an "Absolute" title. You would need indemnity insurance for missing landlord and good leasehold.

Planning is not really an issue because if the work was done in 1985 it would be immune from any enforcement action now even if no permission had been granted. The only point there is that the permission might conditions that could have been breached and such breaches only become immune after 10 years. This isn't very likely - but you can get conditions requiring a particular window to be frosted glass and they changed that to plain glass 5 years ago so the 10 year period only began then. You would have to take a view about that - but in most cases this sort of condition isn't very likely.

In practice Building Regulations isn't really an issue but the technical problem is that there is no formal immunity period so it is theoretically possible that the Council could take enforcement action. If they did, after this time,they would probably find themeselves on the front page of the Daily Mail the following day and there would be some very red faces....

Building Regs is more an issue for lenders because they cannot seem to take a realistic view about them. I assume as it is an auction purchase your aunt is not getting mortgage finance on the property being purchased. If she is it would be risky.

This leaves the lease wording. She needs to read the lease to see if there are any provisions preventing alterations or requiring consent for them. If so she would need an indemnity policy for that - and they are not impossible to get for leasehold risks, but not so easy as for freehold properties where there has been a breach of covenant.

JustKeepSwimming_2

Thanks so much for the reply Richard - really helpful :beer: