Freeholder / lease help

PJV2098

Hello

Could really do with some words of advice or wisdom on the matter of ... getting freeholder persmission to change names on a lease.

We are five months into a very arduous flat-buying process.

We were due to exchange today, but there is a last-minute hurdle: getting the newly extended lease handed over to us. I am not sure why it has reared its head now; we are first-time buyers and solicitors on both sides are pointing fingers.

Apparently, the freeholder's lender's permission is required -- and the freeholder is proving tricky to pin down. We are now concerned that the vendor will get sick of the hassle and pull out / sell to a cash buyer.

Has anyone had any experience with this? Any input or advice greatly appreciated.

loubel

This sounds a bit muddled.

Who is selling you the flat; is it an existing leaseholder or is it the freeholder?

Has the lease already been extended or are you doing this as part of your purchase?

PJV2098

Sorry for the confusion.

We are buying off the leaseholder.

They are extending the lease before completion, but need an undertaking to pass new lease paperwork to us on the day of completion.

They say "on day or soon after" is good enough.

Our lender says that is not good enough; they must have it on day of completion if we are to get our mortgage.

loubel

So the issue is with how quickly the seller's solicitor will forward the paperwork to your solicitor after completion? I can't see how this would involve the freeholder or his lender. Your solicitor will either be trying to persuade your lender to accept the current undertaking or persuade the seller's solicitor to give the new undertaking.

cattie

PJV2098 wrote: »

We are now concerned that the vendor will get sick of the hassle and pull out / sell to a cash buyer.

Has anyone had any experience with this? Any input or advice greatly appreciated.

Very unlikely to happen as you are so far down the road to potentially buy this place. Even if the vendor wanted to sell to a cash buyer, any solicitor will be advising them of any lease issues, just as your solicitor is advising you.

I also don't quite understand what the freeholder's lender has to do with this, surely it's just an issue between freeholder & current leaseholder who has just extended lease or am I missing something here?

PJV2098

Thanks for the help.

As I understand it, the freeholder needs to confirm the new lease is now in our name.

I'm not sure why the freeholder's lender is involved, but this is what we're told by our solicitor. Perhaps because it is a brand new lease, and not a lease extension (it was a very old lease so the freeholder decided to make a new one rather than extend the old one.)

The seller's solicitor is currently chasing the freeholder's lender for "content of dealing", or some such term. Unless they provide this, apparently exchange cannot happen.

Richard_Webster

Freeholder's lender is going to be involved because extending the lease will reduce the value of the freehold so they need to consent to the extension. It looks as if this is about the mechanics of getting their consent.

PJV2098

Hello again folks

Thank you all for the help last week.

Annoyingly my flat purchase still drags on.

This morning, our solicitor asked (yet again) the vendor solicitor for an update on the freeholder's lenders consent to the new lease (phew). That is all that stands in the way. Our solicitor is in funds for the 10% deposit and we are ready to go.

We have been told by our solicitor that if the freeholder consent to the new lease is not available on completion, we face huge difficulty in registering our purchase with the Land Registry -- which is apparently unacceptable to our lender (Nationwide).

In response, the vendor solicitor and estate agent say this is completely unreasonable and is jeopardising the sale.

We, meanwhile, are stuck in the middle, and time is fast running out.

Can anyone please advise?

tim123456789

don't be bullied by the other party

walk away

loubel

There isn't really anything you can do other than continue to wait or walk away.

You won't be able to complete until the lease extension has been finalised as it sounds like your mortgage offer is conditional on getting the extension.

How long is currently left on the lease?

Land_Registry

PJV2098 wrote: »

This morning, our solicitor asked (yet again) the vendor solicitor for an update on the freeholder's lenders consent to the new lease (phew). That is all that stands in the way. Our solicitor is in funds for the 10% deposit and we are ready to go.

We have been told by our solicitor that if the freeholder consent to the new lease is not available on completion, we face huge difficulty in registering our purchase with the Land Registry -- which is apparently unacceptable to our lender (Nationwide).

In response, the vendor solicitor and estate agent say this is completely unreasonable and is jeopardising the sale.

We, meanwhile, are stuck in the middle, and time is fast running out.

Can anyone please advise?

I suspect that there is little you can do to speed up the process but the following might help to understand why such a consent is often required.

It is not a question of 'huge difficulty' but usually a simple case of Yes you can register or No you cannot. Clearly the latter would be unacceptable to you and your own lender.

If the freehold title has a restriction registered in favour of their lender preventing any disposition without their consent then it will be required to enable registration to be completed - most lenders have such restrictions in place and as such i suspect this is the situaiton you are currently dealing with.

If no such restriction exists then registration can proceed but the lender's legal powers may be inhibitted as a result. Your own mortgage lender may therefore be insisting on the freehold lender's consent anyway.

Your solicitor remains the best placed to resolve the issue for you albeit they are dependent on the other side's solicitor and lender for the reasons already explained by Richard Webster