freehold property with old leasehold problems

bigfoot1

Hi there,

I wonder if anyone can help, as my solicitor is being rather vague. We live in a 1930's house that was divided into 2 flats in the 1980's. The people who sold it to us had converted it back to a house, and we bought it as such 10 years ago.

We are currently in the process of selling, and it has become apparent that on the land register, whilst we own the freehold for the entire property, the leasehold is still with the previous owner. The solicitor has also told us there is a 'legal charge' outstanding on the leasehold with Bank of Scotland.

I am quite concerned by all of this, as I'm not sure what it means for us. Firstly, will be it be costly or difficult to put things right on the land register? We had the original leasehold document and it is now with our solicitor. Unfortunately the solicitor we used in our purchase is no longer trading. Secondly, what is a 'legal charge' and would we be liable for it even though we bought the property as a whole and without realising there was still a leasehold on it?

Any help or information gratefully received!

camptownraces

What a mix-up.

It seems probable that things are really (or were meant to be) the other way round - how can you be living in a leasehold house, unless you are the leaseholder or a tenant of the leaseholder?

A legal charge - do you know how much the charge is? It's likely to be sum of money owed to the Bank which has to be repaid on sale (by the previous owner).

But be guided by your solicitor - people on an internet forum can't see the papers that relate to this.

My guess is that it can be sorted out between your solicitor, the Bank of Scotland and HM Land Registry, probably at little cost. But it may take a few weeks, and you won't be able to complete a sale until it has been sorted out.

It sounds as if you have the papers from your original purchase, which will be a great help in speeding things up.

penguine

Sounds like a technicality – the leasehold flats no longer exist and you own the freehold so probably just a matter of some paperwork that needs sorting out.

The legal charge is probably the previous owner's mortgage.

But hopefully someone with more knowledge will chime in here.

Land_Registry

camptownraces has largely covered it for you and by the sound of it the previous solicitor simply failed to spot/follow through on either transferring the leasehold title at the same time as you bought the freehold one or asking the seller's to sort it out before buying.

The legal charge is in essence their 'mortgage' - that should be resolved with the registered lender. Best case scenario is that the charge covered both the freehold and leasehold titles and they can simply lodge the required authorisation with us to have it removed from the remaining title. If they removed it from the freehold to enable the sale to proceed then they may have simply replicated the solicitor's apparent error as well.

Dealing with the leasehold title being still in the old names could be trickier unless they did complete/execute a Transfer of the legal title in the same way as they did for the Freehold title. Normally this would all be done in the one Transfer and with a single application.

If that did not happen then there can often be two options - the first is to trace the previous owners and get them to execute another Transfer. 10 years on this could be tricky?

The second is to try and rectify the title based on available details such as the sale contract referring to both the freehold and leasehold etc. This can be very difficult to achieve though and as mentioned you should rely on your current solicitor's advice as to the best course of action to take here.

camptownraces estimation of a few weeks and little cost is possible but equally you should also be aware that it may take some time to resolve and include a degree of work on your solicitor's part to achieve the desired result - the devil will be in the detail

The key factor from the limited information posted is likely to be the ownership issue and not the charge although the 10 years could complicate matters with regards tracing records of course.

NOTE - penguine is quite right re it being a technicality to some extent but the difficulty you face is that the transfer of ownership is a legal requirement and whilst you know it should have been changed the legal ownership is still with the previous owners so it has not been changed. With every day that then passes the legal requirement does not alter but the ease with which it can then be resolved can get increasingly difficult

I have painted the worse case scenario here simply for awareness though so do rely on your solicitor to cover the actual reality for you.

Such matters are resolvable but they rely on the parties involved to cooperate and to respond in a timely fashion and to still complete the legal/registration requirements. The passage of time on it's own make little or no difference to that legal/registration requirement I'm afraid.

Hopefully your solicitor will be able to secure a better/swifter outcome though

bigfoot1

Thanks so much everyone for your helpful replies. For some reason I didn't realise that anyone had responded to my post until now, but I'm very pleased to say that we resolved the issue (eventually!) and are now happily living in our new house!

Thanks again all and sorry for the late reply!

TrickyDicky101

How was it resolved?

bigfoot1

Through hassling our solicitor to hassle the solicitor who acted for the people we bought from 10years ago virtually every day for a couple of months! We also had to do some detective work to track down the previous owners ourselves as we kept being told they'd been contacted when they clearly hadn't been!

It was a bit of a nightmare to be honest, but I guess house buying and selling is never as simple as you might hope.