Advice needed - house advertised as freehold becomes leasehold just before exchange!

teresa1981

Hi,

I am a newbie and never posted before, but would be grateful if anyone is able to advise me.

We made an offer on a property about 5 weeks ago, this was accepted, and the usual searches, mortgage applications etc took place.

When the land registry search came back, there was mention of a leasehold in 1938. prior to this all documentation had stated the property was freehold, and the initial contracts sent by the vendors solicitor to my solicitor also said the property was freehold.

My solicitor raised this with the vendors solicitor and I had an email from my solicitor today, stating that "I have now heard back from the Solicitors acting on behalf of the Seller. It transpires that they made errors when they submitted the contract papers to me. You are actually going to be buying a leasehold property from a Lease dating back to 1938."

The lease has 27 years left, and I am not at all interested in buying a leashold property.

I have now spent around £1600 on searches, solicitors fees and mortgage fees for a property which I would not have entertained making an offer on had I been aware that it was in fact leasehold.

Is there any way I can seek to recoup any of these costs from either the vendors, or their solicitors?

Any advice would be welcome.

I have obviously now pulled out of the sale.

Thanks.

G_M

No.
You paid your solicitor to do a job (check the legal Title of the property on your behalf) and he has done just that. Be glad you spent the money on finding out before you commited to buying this 27 year lease.

KateLiana27

I wouldn't buy a property with 27 years left on it either. And if you are buying with a mortgage, will your mortgage offer actually stand with this new information?

You are perfectly entitled to ask (and expect) the vendor to pay for an extension of the lease, if this is possible - there's a good chance it will be. You can't force them to do this but they would be stupid to lose a good buyer in this market over this. A leasehold property is not necessarily a problem if there is a good length of time left on it, and obviously depending on the conditions of the lease.

For what it's worth, I don't believe they just "forgot" that the property was leasehold with very limited lease left, and I do very much hope you will have recourse if things fall apart. It's shocking how easily people can lie for their own benefit, without any consequences.

KRB2725

I freely admit that I know nothing about the legalities - but could this not be a case of misrepresentation? How long have the owners lived there? Unless they were cash buyers, I don't understand how they managed to obtain a mortgage (unless they've been there 30+ years). Also, unless they have been there a considerable amount of time, how could they possibly not know?

I really hope there is some recourse for you.

teresa1981

Thanks for the responses.

To clarify, I am very happy with the work of my own solicitor, and happy to spend the money on them finding this out!

I just find it very difficult to believe that the vendors solicitors could make such a major error on the contract as saying the property is freehold.

kmmr

Twenty seven years! Yikes - sounds like a lucky escape. If they thought it was freehold, is there any chance they can make it freehold now? Do you know who the freeholder is?

I don't know at all what the process is, but if it's an old lease, potentially with a missing freeholder (if the current owners really didn't know it was leasehold, might be because they never paid ground rent etc) is it possible to convert the lease to a freehold?

pararct

teresa1981 wrote: »

Thanks for the responses.

To clarify, I am very happy with the work of my own solicitor, and happy to spend the money on them finding this out!

I just find it very difficult to believe that the vendors solicitors could make such a major error on the contract as saying the property is freehold.

Then ask your solicitor on the chances of litigation to recover all or part of your costs.

If they are owning up to an error and you have spent good money in the knowledge that everything was represented properly then there may be a way forward.

kingstreet

teresa - do you by any chance know if you're the first person to agree to purchase this property since it went on the market?

I feel the vendor's solicitor can plead ignorance of this lease issue if he's only been instructed recently and hasn't been a party to a previous aborted sale.

A little detective work might yield some interesting results.

DVardysShadow

teresa1981 wrote: »

... My solicitor raised this with the vendors solicitor and I had an email from my solicitor today, stating that "I have now heard back from the Solicitors acting on behalf of the Seller. It transpires that they made errors when they submitted the contract papers to me. You are actually going to be buying a leasehold property from a Lease dating back to 1938."

Although normally you cannot claim back if you pull out before exchange, I believe in this case it would be reasonable to claim back for all expenses from the moment the vendor's solicitor sent a contract which purported to be for a freehold property.

bris

Certainly wouldn't hurt to try and recoup the costs. A house advertised as freehold is clearly misrepresented and and with just 27 years left is practicaly unsellable. I don't think this is the usual case of a buyer or seller pulling out with no penalties. Whether it's the vendor or their solicitors you chase is what you need to determine, I would think it would be the vendors as they should have known it wasn't freehold and instructed their solicitor of this.
It is very cheap to start a small claims action so nothing much to lose and a very good chance of success.

DVardysShadow

kingstreet wrote: »

teresa - do you by any chance know if you're the first person to agree to purchase this property since it went on the market?

I feel the vendor's solicitor can plead ignorance of this lease issue if he's only been instructed recently and hasn't been a party to a previous aborted sale.

A little detective work might yield some interesting results.

Vendor's solicitor is merely vendor's agent here, so the vendor is the one to pursue. The actual division of responsibility between vendor and his solicitor is for them to sort out between themselves.