what is my solicitor saying?

daxu

Hi,
Got bit confused after several email exchanges with my solicitor.

I am trying to purchase a flat (share of free hold) and she told me:
alterations had been carried out at the property without the Freeholder’s consent.

Basically there are three flats in this converted house and every owner has 33% of the free hold.

The flat now is a 1 bed flat, and from the lease plan I can see, apparently it was a tiny two bed (separated by internal wall).
Now the internal wall is gone and the bathroom was moved slightly but pretty much the same location.

I did some check and believe changing these do not need planning permission. But my solicitor say I should:

have a floor plan drawn up (these are done by an external company and usually costs about £200.00 - £500.00) by a Lease plan company.

You would then need to have a Deed of Variation drafted (which I could do for the below fee) which would then need to be signed by Freehold company (means me and other two owners of the flat in the same building).

I tried to understand what is a lease plan company, but can't really find much information. Can someone help? Is this something needs to be done?

Many Thanks

G_M

First you need to understand the legal arrangements:

* there are 4 seperate Titles (deeds) relating to the building
* 3 of them are leases, presumable owned by 3 people -1 for each flat
* 1 of them is the freehold (owership of the land and structure of the building). In your case, this happns to be owned jointly by 3 people, who happen also to be the 3 lease owners
* each lease specifies what each flat -owner owns as part of their lease, what they must do/pay (eg maintenance costs) and what they must NOT do (eg alter the flat without consent)
* consent can only be granted by the freeholder - in this case 3 people jointly. One leaseholder cannot unilaterally grant consent!

Since in the past some leaseholder (your seller?) has altered the flat without consent, there is the possibility that the freeholder (the 3 people, or 2 out of the 3) could demand that the flat be re-converted back to how it was

There is almost certainly a 'Plan' attached to the lease. This shows the layout. This is how the flat should be.

To keep the illegal changes in place, the Plan should be altered, with the consent of the freeholders, so that the new layout is legitamised.

However, this should not be down to you as a buyer. The seller is the one who owns the lease at present, and who is in breach of his lease, so he should apply for the consent required. He should draw up a new Plan (or get a professional to do so) present it to the freeholders (himself and the other 2), and get it agreed.

then he can sell to you a legitimate lease.

Sadly for you, this is likely to take time, especially if the other 2 joint freeholders are absentee (perhaps they rent their flats out and live abroad?), or if they object to the new Plan, or if they demand a payment from the leaseholder in return for their consent.

daxu

Hi G_M,
Thanks for this. The problem is time. My solicitor told me that it can take quite a while to get plan changed, so he recommended to accept an indemnity policy to protect you against financial loss as a result of the Freeholder enforcements for the breach of lease AND an indemnity policy for Lack of Building Regulations. (Paid by the seller).

Will this be enough?

G_M

So imagine the scenario:

* you buy the flat (with an indemnity insurance)
* the freeholders enforce the lease
* you re-convert the flat from 1 bedroom to 2 bedroom
* you claim the cost of this off the insurers

Will you be happy living in a pokey 2 bedroom flat? If yes, there's no problem. If no, what would you do? Move? Again?

davidmcn

G_M wrote: »

So imagine the scenario:

* you buy the flat (with an indemnity insurance)
* the freeholders enforce the lease
* you re-convert the flat from 1 bedroom to 2 bedroom
* you claim the cost of this off the insurers

More likely that the insurers pay off the freeholders if they try anything funny.

DandelionPatrol

davidmcn wrote: »

More likely that the insurers pay off the freeholders if they try anything funny.

So if the freeholders get a whiff of money in it for them, they will be more likely to try it on.

davidmcn

DandelionPatrol wrote: »

So if the freeholders get a whiff of money in it for them, they will be more likely to try it on.

Which is why it's a condition of the insurance policy that you don't tell them you've got insurance...

daxu

G_M wrote: »

So imagine the scenario:

* you buy the flat (with an indemnity insurance)
* the freeholders enforce the lease
* you re-convert the flat from 1 bedroom to 2 bedroom
* you claim the cost of this off the insurers

Will you be happy living in a pokey 2 bedroom flat? If yes, there's no problem. If no, what would you do? Move? Again?

Thanks, I will also be a free holder, so I think it is going to be fine.

LandyAndy

davidmcn wrote: »

Which is why it's a condition of the insurance policy that you don't tell them you've got insurance...

daxu wrote: »

Thanks, I will also be a free holder, so I think it is going to be fine.

Yes, you will be fine if you don't tell yourself about the policy.

martindow

daxu wrote: »

Thanks, I will also be a free holder, so I think it is going to be fine.

Are you buying with a mortgage? You may find that they will not be willing to go ahead until this is resolved.

Speak to your solicitor and don't assume 'it is going to be fine'.

DandelionPatrol

davidmcn wrote: »

Which is why it's a condition of the insurance policy that you don't tell them you've got insurance...

LandyAndy wrote: »

Yes, you will be fine if you don't tell yourself about the policy.

Well spotted! Essentially, OP has a conflict of interest between being a leaseholder and being a free holder.

I am thinking that maybe OP is not eligible for this insurance.