Can't get share of freehold title transferred as one of the freeholders is deceased

Cazza_uk

I am trying to buy a flat with share of freehold, but one of the freeholders is deceased, and the beneficiary of the estate has been non responsive to sign the transfer of title and the required lease extension. There are 3 flats so it is just one of the shares of freehold that is causing the issue. The freehold is not owned by a company unfortunately, it is owned directly by each of the freeholders.

Is there a way to force this matter to a close through some sort of process as the flat is basically unsellable otherwise?

Is it possible to seek an order for the remaining 2 freeholders to be allowed to sign over the title as the third freeholder is 'in effect' unable to act?

Is it even necessary for probate to be granted to transfer the title or to extend the lease? The lease only has 62 years remaining and the mortgage offer is conditional on at least 80 years remaining.

Would purchasing a 'missing landlord indemnity policy' cover this type of scenario?

It can not be allowed to just remain an open ended issue where the seller ‘hopes’ the beneficiary of the estate is kind enough to respond to his numerous messages.

Thanks!

xylophone

The deceased left a will? There is an executor? Probate was granted?

Who put the property on the market?

Cazza_uk

Hi, thanks for your response.

I wasn't clear in my post, just one of the three freeholders is deceased but not the freeholder I am buying from. The property I am buying is one of three flats from a 'normal' seller. For the deceased freeholder of another of the three flats they didn't have a will so it has taken two years just to establish who the beneficiary is and value their estate. None of that would matter except for the fact that I needed them to sign over the transfer of title for the flat I am purchasing. We can't even establish if probate has been granted yet as the beneficiary is mostly non responsive and based in the US.

getmore4less

If the share of the freehold tied to the lease of the flat?

What is happening with that?

You will need to identify who is planning to administer the estate, transfer of the share of the freehold previously owned by the deceased will need a grant to transfer it to someone else.

Catti

Ask your solicitor to look at a Land Registry practice guide!!
http://www.landregistry.gov.uk/professional/guides/practice-guide-24

propertyman

Well you are not as there is not such thing as share of freehold, if there were then you would not have that problem. The freehold is owned by 3 people A B C all of whom has to sign the transfer to make a b and d, you, the owners.

In this case I suspect that it is the matter of the estate that is preventing the signature but otherwise there is no basis for compunction, other than by the other two joint owners of the freehold but they are still limited by the estates power and willingness to deal with matters.

As for http://www.landregistry.gov.uk/professional/guides/practice-guide-24 that only applies if the freehold is held in trust most are not and in this case the lease extension complicates that.

This is not the case of an absent freeholder. it may take the FTT to determine the lease extension terms and a court order to force them to do so however if the estate is complicated they will be given time.

Catti

propertyman wrote: »

Well you are not as there is not such thing as share of freehold, if there were then you would not have that problem. The freehold is owned by 3 people A B C all of whom has to sign the transfer to make a b and d, you, the owners.

In this case I suspect that it is the matter of the estate that is preventing the signature but otherwise there is no basis for compunction, other than by the other two joint owners of the freehold but they are still limited by the estates power and willingness to deal with matters.

As for http://www.landregistry.gov.uk/professional/guides/practice-guide-24 that only applies if the freehold is held in trust most are not and in this case the lease extension complicates that.

This is not the case of an absent freeholder. it may take the FTT to determine the lease extension terms and a court order to force them to do so however if the estate is complicated they will be given time.

Because it is in joint names - it is, in fact, in trust.

propertyman

Well no not neccessarily so. Even if we say that the 3 parties might be regarded as holding the freehold in trust, in the abscence of a declaration, the purposes for which they entered into the holding, and their respective interests, and how those were documeted or agreed, can work against the presumption, especially of that document, that the estate's interest can be transferred with little reference to them.

For these purposes there is a world of difference between how it is held and one where there is a declaration of a declaration of trust or a variety of other forms of agreement, even loan agreements, rather than a broad concept of being in trust.

Moreover if there are significant interests or vlaue as there is it is likely to quicky draw the attention of the estate.

Catti

I think that over complicates what can be a straight forward process. If the Land Registry are notified of the death of one owner, they will take that name off the register. The Form A restriction remains, warning any prospective purchaser that he must acquire from at least two trustees. There are two left here, so that can pass the legal title safely to the buyer. It is then a matter for the Trustees to ensure that any proceeds are applied as per the beneficial interests, but it would facilitate passing the title, and then the Lease extension can be dealt with too.
As the link itself states:
If one or more of the joint proprietors has died, a purchaser can safely deal with the survivors in the knowledge that the legal estate has passed automatically to them, whatever may be the case with the beneficial interests. If there is only one survivor, then one or more additional trustees must be appointed so that the beneficial interests can be overreached in favour of a purchaser.

Richard_Webster

Yes any property held by more than one individual is technically held in trust. The problem is working out the terms of such a trust.

As Propertyman has pointed out there is no general law governing "shared freeholds" - because they do not exist as a separate form of land tenure. The ordinary rules of freehold and leasehold apply. So why should the other co-freeholders co-operate in a transfer from abc to abd?

A court might be persuaded that in all the circumstances there was an implied trust to hold the freehold for the benefit of the lessees of the flats - but I wouldn't want to advise anyone that this would be successful. It would cost £thousands and this money could be totally wasted.

As a buyer you would have no right to start such proceedings so you would have to get the existing findable freeholders to do so - why should they unless they are really desperate?

When I have acted on purchases of flats where there was a freehold literally owned by the individual lessees I have always advised buyers of the dangers of a scenario similar to yours occurring. Ideally anyone buying such a property should get the sellers to get a deed of trust drawn up between all the co-freeholders which says that the freehold is held on trust for the lessees for the time being and provides a mechanism to dispense with a signature if someone refuses to sign over the freehold, given say a month's notice in writing.

Problem is that usually the seller and his co-freeholders can never see the point of this and don't want to spend the money because "We've never had any problems...."

Cazza_uk

Thanks for your fantastic responses, this is amazingly helpful.
I just need to clarify, the building is jointly owned by the three freeholders, as joint tenants (that means they all collectively own all of the building together, rather than owning designated shares. The three freeholders then each lease one flat each back to an owner, so in this case case the lease of flat C is from the owner of flat C (i.e. from themselves) and the owners of flats A (deceased's estate) and B.

As I understand it to date, I have been told that to effect the sale they need the three freeholders to each sign the transfer document, and to extend the lease we need the same. Now the vendor's lawyers tell me that the Land Registry can apparently strike flat A from the freehold title, which would enable us to proceed with just flats B and C (for both the transfer and the lease extension). They have discussed this with the Land Registry already and have been asked to put their request in writing, which they are doing. Any idea how long this will take?

This may be the point that a few people were making about the freehold being deemed to be held in trust, regardless of whether there is a written/signed trust or not.
Someone else advised me that "There were three legal owners of the freehold, one of which is now deceased. Due to the fact that the legal estate can only vest as a joint tenancy, the survivorship principle applies which means that the freehold is from the date of the death now held by the two remaining trustees. Two trustees are sufficient for overreaching to occur, so any beneficial interests under a trust (such as that of any beneficiaries from the deceased's estate) will overreach and not bind a purchaser.
So as long as the other two trustees sign the transfer deed you should be okay? "
If that latter is true, would this need to be confirmed by the land registry or is this principle outlined somewhere in statute or case law?