Property has both a freehold AND leasehold title

Claire_A87

Hi,

Sorry if this has been brought up before - my partner and I are FTBs & nearing the end of the buying process. When we put an offer in on our house we were informed it was freehold, and applied (& were thankfully accepted!) for a HTBMG mortgage with Santander on that basis.

When we received the draft contract the house was described as 'freehold/leasehold', which we thought was strange. Having looked in to it a lot we now know it's not uncommon for titles to not be merged upon the owner of the leasehold buying the freehold as either the original lease could be lost or the leasehold title may have additional rights, so we're not concerned now.

However, our solicitor has had to report this back to Santander to check they have no issue with this. Has anyone been in the same situation and had a problem with their mortgage lender? Having received our mortgage offer it simply states that the first charge MUST be registered against the freehold title (as we applied on the basis it was a freehold property), which this will be. I'm just a bit concerned that we'll have to get a new mortgage offer or something and wondered if someone could share a similar experience?

Many thanks

blackshirtuk

When we bought our house there was a freehold and a lease registered to the previous owners.

Our solicitors said there were no issues and at completion the lease title would be removed from the land registry, that is exactly what happened. There is now only a freehold title registered to the property with the mortgage company as first charge.

princeofpounds

There have been a couple of these on the board recently. The main thing to watch out for is that the terms of the lease still apply to you.

So someone bought the freehold and leasehold to their council house, but were still bound to pay a service charge to the council rather than themselves as freeholder under the terms of the lease. I presume they covenanted not to collapse the leasehold/freehold too.

Rather unusual, but thought I'd mention it.

Claire_A87

Thanks BlackshirtUK, nice to know it's not totally uncommon!

princeofpounds wrote: »

Rather unusual, but thought I'd mention it.

No, thanks it's all useful at this stage! We know from enquiries etc that there's no ground rent or anything still applicable to a third party, it really is just a case that the current vendors (who have owned the property for years & years) didn't merge the titles for whatever reason. As mentioned, as Santander will obviously have the first charge placed against the freehold title I can't see too much of an issue. The main concern is whether Santander will make a song & dance about it...

Land_Registry

This can happen and there can be a number of reasons why people don't merge for example they may keep the leasehold title live just in case they decide to sell that and retain the freehold or they simply forget to apply and I suspect there are other reasons as well.

If your solicitors make it clear that you will be owning both tenures and that the leasehold title will be merged at the time of purchase then it seems unlikely that the lender will have any issues - they are often far happier dealing with a single title/tenure after all

Claire_A87

Land_Registry_representative wrote: »

This can happen and there can be a number of reasons why people don't merge for example they may keep the leasehold title live just in case they decide to sell that and retain the freehold or they simply forget to apply and I suspect there are other reasons as well.

If your solicitors make it clear that you will be owning both tenures and that the leasehold title will be merged at the time of purchase then it seems unlikely that the lender will have any issues - they are often far happier dealing with a single title/tenure after all

Thank you very much, you've helped put my mind at ease. I'd never heard of a property having 2 live titles previously, but after digging around online I can see it's not uncommon for, as you say, a variety of reasons. Thanks again

GalaxyStar

Land_Registry_representative wrote: »

This can happen and there can be a number of reasons why people don't merge for example they may keep the leasehold title live just in case they decide to sell that and retain the freehold or they simply forget to apply and I suspect there are other reasons as well.

If your solicitors make it clear that you will be owning both tenures and that the leasehold title will be merged at the time of purchase then it seems unlikely that the lender will have any issues - they are often far happier dealing with a single title/tenure after all

Sorry to jump in OP but our house is the same and I wanted to make sure that I understood this a had been thinking about positing myself, hope you don't mind!

When I go on the land registry website our house has a leasehold and a freehold title, I don't want to buy both as I presume the solicitor will be doing. The street the house is on has a lot of leasehold properties on, and we have been told ours is freehold. Do the two titles mean that the vendors had purchased the leasehold and not got rid of the leasehold title?

Land_Registry

GalaxyStar wrote: »

Sorry to jump in OP but our house is the same and I wanted to make sure that I understood this a had been thinking about positing myself, hope you don't mind!

When I go on the land registry website our house has a leasehold and a freehold title, I don't want to buy both as I presume the solicitor will be doing. The street the house is on has a lot of leasehold properties on, and we have been told ours is freehold. Do the two titles mean that the vendors had purchased the leasehold and not got rid of the leasehold title?

Not necessarily and often the only way to tell is to check.

You say 'our house.......I don't want to buy both as I presume the solicitor will...' - are you buying a property then?

If you are then the sale details should state the tenure you are buying and as you say the solicitor will be checking.

I would simply flag up the possibility with them and see what arises or, if you want to check, then view the freehold only as if there is a leasehold tenure then it should be referred to on the freehold title anyway.

GalaxyStar

Land_Registry_representative wrote: »

Not necessarily and often the only way to tell is to check.

You say 'our house.......I don't want to buy both as I presume the solicitor will...' - are you buying a property then?

If you are then the sale details should state the tenure you are buying and as you say the solicitor will be checking.

I would simply flag up the possibility with them and see what arises or, if you want to check, then view the freehold only as if there is a leasehold tenure then it should be referred to on the freehold title anyway.

Sorry, I think of it as our house even though we haven't really got it yet! It's a house we are purchasing, the elderly owners have lived in it for many years and our memorandum of sale states it's freehold bit the two titles are throwing me off. I haven't mentioned it to the solicitor just yet but I will get onto them and see what they say too. Just dont want it to turn out it's leasehold!

Claire_A87

A leasehold house will always have two titles as someone must be the freeholder, so if your sellers have told you it's freehold then it sounds like you're in the same position as me & the titles haven't been merged for whatever reason

Richard_Webster

This situation is fairly common for a long leasehold house where the freehold has later been acquired..

We often do not merge the two titles because leasehold rights may still be needed for the remainder of the 999 years (e.g. to use a rear accessway) that do not appear in the freehold title to the property. We simply tell the lender the title is freehold but register the mortgage against both titles.