House we are buying is both Freehold and Leasehold ? Help !!

bikingbarney

As title really I am after some help/advice please.

We are buying a repossessed house, so far everything seems to be going quite smoothly.

Yesterday I received a copy of the title documents with a covering letter form my solicitor.

In the letter she states the house is both freehold and leasehold and that most of the document is now no longer applicable as the property is now freehold there are still various rights which are still applicable to the property such as right of maintenance of the boundary and walls.

There are also various others too.

She has gone on to say that she will be applying for a merger? of the Freehold and lease hold at completion.

Has anyone come across this before and is it something we should be worried about?

Are we still liable for the annual charges laid out in the lease?

many thanks

G_M

No problem. You are getting both Titles (as I read your post).

Are we still liable for the annual charges laid out in the lease?

As leaseholder, you will have to pay this to the freeholder. As freeholder you will receive it and put it in your bank account!

there are still various rights which are still applicable to the property such as right of maintenance of the boundary and walls.

I assume you mean 'obligations'. As leaseholder you must abide by these, or the freeholder could decide to take action. As freeholder, it will be up to you whether or not to take action against yourself for any breach.

She has gone on to say that she will be applying for a merger? of the Freehold and lease hold at completion.

Once this is done, the leasehold Title will disapear and the property will simply be freehold.

bikingbarney

Thanks very much for that !.

There are 3 titles for the property, one is the Leasehold, One is a Freehold and Im guessing as its dated earlier this year the last one is the Title for the bank when they took the property back.

Am I right to think all 3 will be transferred into my name?

G_M

Titile for the bank? That is different.

That is simply who owns the lease and freeholds I imagine.

Naturally, on any purchase, the owner's name is changed for whichevver Title(s) is/are being bought.

somethingcorporate

Talk to your solicitor, this is what you are paying them for.

bikingbarney

Yep I have sent an email to the solicitor and await a response.

The title I refer to about the bank is dated this year and it ties in with when the house was repossessed.

princeofpounds

Hi bikingbarney, I think you are confused over how these different types of title work. People are being a bit cautious because they don't want to cause you further confusion by talking about topics without knowing how you will interpret them.

The fact that there is a freehold title and a leasehold title to the property is not unusual.

Sometimes these are owned by separate people, but often they are owned by the same person, particularly as leaseholders often have the right to buy out the freehold at some stage.

If the lease specifies a ground rent, you do owe that to the freeholder. As the freeholder is also you however, then in practical terms you owe yourself money and nothing changes hands. Basically, all the obligations and duties of the lease still hold, but because they are generally owed by you, to you, then most of them become irrelevant.

If they are owned by the same person it is normally not a problem to merge the two titles, which is legally neater but doesn't change much in a practical sense.

One thing to note... sometimes, the two cannot be merged due to the way they were set up. This is sometimes the the case when the leasehold imposes an obligation to a third party who is not the freeholder (typically a payment to a body that maintains a local amenity, like common land, which is not or will not be owned by the freeholder). Again that is nothing to worry about, but you need to understand the obligation. It doesn't sound like it is likely to be relevant to your situation however if a merger is planned.

When you say there is a third title 'for the bank' I think you may be confused. Perhaps you are thinking about the bank's charge over the title. This is something a mortgage lender puts on the property so that it cannot be sold without their permission. This should also be removed as part of the transfer.

But anyway, ask your lawyer to clarify all this.