Missing Lease and other troubles

pandarabbit

Hi everyone!

Myself and my partner are in the process of buying a leasehold flat. We have got a mortgage offer and had a survey done. The survey was ok, nothing major but a few things to be done....

However.... We have just found out that the land registry 'cannot locate' the original lease. The seller and their solicitor have know about this for 6 months prior.

So far they have only provided a copy of a copy of the lease between previous lessor /lessee .... Not good enough for us , our lender and most likely the land reg.

Additionally this copy of a copy revealed that the lease was not 86 years as advertised, but only 84 years... This leaves us very little time to sort out extension in 2 years time.

Further to that, the maintance / service charges are more than double what we were told pre-offer... We expected £600pa (inc. Ground rent) but its actually around £1300 with a 2.5% yoy increase on maintenance and management fee....

Also.... We offered on the flat after telling the agent we had pets and enquiring if the property had real wood floors under carpet (as we would plan to restore these whilst re-decorating) however the lease says everything must be carpeted and pets must have written consent (which can be revoked without notice)...

Our solicitor has suggested we will need to either get a certified copy of the lease, or demand that they surrender the current lease and grant a new one...because there is no marketable title at present.

Because of the other issues we are leaning towards asking for a new lease.

If we did that, would it be fair to presume we would get 99 years and could request adjustments to the terns we object to?

The only other option we can see is making a significant reduction in our offer (around 10k) ... Or to walk away.

Has anyone been in a similar situation? Has anyone selling a leasehold flat had a buyer demand a new lease and sorted it out?

P.s the sellers solicitor is absolutely rubbish... So we are rapidly losing faith in their ability to sort out all the issues ..

AdrianC

pandarabbit wrote: »

However.... We have just found out that the land registry 'cannot locate' the original lease. The seller and their solicitor have know about this for 6 months prior.

And the freeholder can't provide a copy?

Also.... We offered on the flat after telling the agent we had pets and enquiring if the property had real wood floors under carpet (as we would plan to restore these whilst re-decorating) however the lease says everything must be carpeted and pets must have written consent (which can be revoked without notice)...

So the lease is pretty much irrelevant, and it sounds like it's not the flat for you anyway. Hey-ho. Offer withdrawn, on with the search.

pandarabbit

Not sure about the freeholder. My assumption is yes, they will have a copy.... But is that as good as the original?

Indemnity insurance is also being talked about due to the missing documents so would that be applicable if relying entirely on freeholders copy?

You may be right about going back to the search... Although we would hate to not get this flat as its by far the best thing we have seen...

I guess my thought is, can we turn a disadvantage (I.e. Missing docs) into an advantage for us (I.e. New lease, more years, re-worded terms)? Or am I being over optimistic here?

Happy to hear any thoughts or opinions!

bouicca21

This is going to take months to sort as well as be pricey. Your mortgage lender will most likely pull out. Walk away.

eddddy

pandarabbit wrote: »

I guess my thought is, can we turn a disadvantage (I.e. Missing docs) into an advantage for us (I.e. New lease, more years, re-worded terms)? Or am I being over optimistic here?

A new lease could have a longer term (more years) - but the freeholder would expect payment for that. Effectively it would be a lease extension.


Regarding the other covenants (carpet, pets etc) - those covenants probably can't be left out of a new lease. The freeholder has probably covenanted that all leases will contain the same covenants.

i.e. In simpler terms, the freeholder has promised each leaseholder that he/she will not allow other leaseholders to remove carpets or have pets without consent.

AdrianC

pandarabbit wrote: »

Not sure about the freeholder. My assumption is yes, they will have a copy.... But is that as good as the original?

The lease is a contract between freeholder and leaseholder. The freeholder's copy is just as "original" as the leaseholder's.

I guess my thought is, can we turn a disadvantage (I.e. Missing docs) into an advantage for us (I.e. New lease, more years, re-worded terms)? Or am I being over optimistic here?

Frankly? Yes. There is no way you'll get blanket terms like "no pets" or "must be carpeted" - which are in there to keep harmony between residents - removed. And if your complaint is that the service charges are too high...? Nope...

Annisele

pandarabbit wrote: »

Although we would hate to not get this flat as its by far the best thing we have seen...

In that case, I'd be worried about the vendor pulling out at a late stage.

It sounds like the vendor knows about the problems, so they might have priced low in the hope of getting a buyer prepared to overlook them. If the vendor ends up forced to actually sort things out, they might then decide the flat is worth more (and from the sounds of it, they might be right).

I'd walk away. If the vendor has known about this for six months but not sorted it, I'd not expect resolution any time soon. And I'd hate to wait around for somebody who already seems flaky!

G_M

pandarabbit wrote: »

However.... We have just found out that the land registry 'cannot locate' the original lease. The seller and their solicitor have know about this for 6 months prior.

So far they have only provided a copy of a copy of the lease between previous lessor /lessee .... Not good enough for us , our lender and most likely the land reg.

You misunderstand how leases work. A new lease is not issued each time a new buyer comes along. The new buyer simply buys the existing lease.

So the lease between the previous lessor/lessee is exactly what you will be buying (assuming the "previous lessor" was the original lessor).

So if, for example, the original lease was issued to lessor A, for 125 years, in the year 2000, it does not matter how many times it has changed hands since (to lessor B, C, D etc). You, as lesor E can buy it now. It will still be in the name of lessor A (NOT the name of the peron you buy from) since it is the same lease that was issued in 2000. However it now has just 99 years remaining.

The Land Registry does not keep copies or originals of all leases. The current lease owner should have either a copy (if the LR has the original), or should have the original (if the LR does not).

The current freeholder (who may or may not be the named freeholder on the lease, since the freehold, like the lease, could have been sold since 2000) should also have an original.

ps - the Land Reg won't care what copy the seller gives you. When/if you buy the lease, you will submit a TR1 to the LR who will then record your purchase.

However, this is all irrelevant since
a) you have pets and the lease prohibits pets and
b) you want to rmove carpeting the the lease prohibits this too.

Move on.

steeeb

Pets: Depending on the type of pet they may allow you but then if it causes issues to others and others complain they'll quickly revoke that. Stops noisey pets.

Carpets: Stops noise. You can take them up but if someone complains you'll be breaching the lease and will be recarpeting.

Service Charge: Agent likely going off what the vendor said - wouldn't be happy about this.

Seems like you need to pull out regardless?

pandarabbit

Thanks everyone - its good to get some objective advice.

We have just heard from the agent that the seller's solicitor has bascially messed up and does have the correct documentation... although god knows why it wouldn't have materialised sooner...

We are going to wait and see what they can produce and make a decision from there.... we have given them till end of the day today. We have also arranged to go back to the property so we can stand in it and ask ourselves 'is this worth the hassle?'

I guess re: pets and carpets these are things we would be likely to face with any leasehold property. The carpets I can live with in all honesty (and probably wouldn't give it a second thought if this was the only snag). I suppose the pet clause would be workable as my rabbits and frogs don't make any noise -but we would have to get permission from the freeholder before completing...... will give these a bit more thought...

G_M - Yes, you are bang on, I totally misunderstood that point. Thank you for your explanation. I suppose this means that the copy of the copy gives us a soild idea of what to expect. In which case we can decide if the restrictive terms are a step too far for us, using what we know now.

In reagrds to the vendor, I am not hugely concerned they will pull out. Reason being they are trying to buy a property themselves (through same agent) and are reliant on this sale. I do genuinely think they will accept some re-negotiation. However in so far as extending the lease term, I expect this will depend on the Freeholder's willingness to negotiate informally. All things said and done it may still be worth a reduction in price... maybe... seeing as we offered at the top end of the normal range (based on property type/location/condition/no. of beds)...

Thanks again - will be interesting to see if anything else comes to light today

AdrianC

pandarabbit wrote: »

In reagrds to the vendor, I am not hugely concerned they will pull out. Reason being they are trying to buy a property themselves (through same agent) and are reliant on this sale.

That actually increases the possibility, rather than decreases it. They are exposed to risks outside their control. What if the person they're buying from pulls out? What if their chain collapses?

However in so far as extending the lease term, I expect this will depend on the Freeholder's willingness to negotiate informally.

Personally, I'd wait until the two years is up and go for the statutory renewal. You should already have priced that up ( http://www.lease-advice.org/calculator/ ), and taken that into account. You can bet that trying to informally renew a near-80yr lease, as a new owner so unable to take the statutory route, is not going to see you in a strong negotiating position...