Offering on house that is leasehold - advice needed

dpullen1987

[FONT=&quot]Hi Guys,

I'm after some advice and hope somebody here can help. We have sold our house STC and are now in the process of viewing different houses trying to find the "perfect" home. We viewed a 4 bed semi on the weekend that both me and my wife liked and we put an initial offer in that got rejected. We have since increased our offer and have yet to hear a verdict because the vendors were waiting to see the outcome of other viewings they already had scheduled.

In the meantime, we have discovered that property is leasehold and when queried with the estate agent they said the below.

"After receiving the compliance pack, it has come to light that there is a 999 year lease, due to an absent freeholder. The property can never be freehold, and the lease extends itself when it runs low. There are also no lease restrictions, hence why the property has been extended without any issues. The vendor has advised us there is no ongoing cost- hence why she informed us that it is technically freehold, as there are not and will never be any costs associated with the lease"

I've always been told by parents etc. to stay away from leasehold properties in the past and now I'm unsure what to do.

Any advice would be much appreciated.[/FONT]

always_sunny

Unless it's a flat, I wouldn't buy a LH house.
Flats, as it is in England it's the only option, but houses have no reason to be LH.

spidereyes

Firstly I would say that this information has come from your estate agent and take anything they advise with a pinch of salt. Your estate agents are not legally qualified to comment on the terms of the lease and no doubt have not had sight of it. there are many issues with what they have advised you.

The lease will not automatically be extended at the end of the term so ignore this. In the case of a short lease, If the freeholder is truly missing then all reasonable steps need to be taken to locate them, if they cannot be found then all evidence needs to be presented to a court to convince them that all reasonable endeavours have been made and if they are satisfied they could grant an extension on the missing freeholders behalf.

The property may well have been on a 999 year lease but how long is now remaining?

It is only the seller/agents opinion that the landlord is missing - there may well be a registered title at land registry and that a solicitor may easily locate them.

It's impossible for the agents to say that there will never be any costs associated, it may be that the landlord has simply chosen not to exercise their right to collect any ground rent (if applicable to the specific lease) for that period, that's not to say say the landlord may not choose to collect in future.

You can obtain an indemnity policy for absent/missing landlord which can provide protection against a claim in the future for backdated ground rent or breach of covenants should the freeholder then come forward.

dpullen1987

Thanks for the advice, basically stay well clear then?

The property in question is rightmove.co.uk/property-for-sale/property-46219551.html

ThePants999

spidereyes wrote: »

The property may well have been on a 999 year lease but how long is now remaining?

Come on. Does it make the slightest shred of difference whether there's 950 years remaining or 970 years remaining? The lease won't expire in the lifetime of the OP's great-great-great-great-(etc)-grandchildren, so it's close to irrelevant.

It's true that (a) leasehold houses are uncommon and weird, and often worth avoiding, and (b) there's a CHANCE of issues/costs as a result of this. However, I wouldn't be worried. It wouldn't put me off a property that I otherwise liked.

However, that's on the assumption that what you've been told is true - and spidereyes' point that you can't trust EA-provided information, you need to hear it from your solicitor, is bang on.

elverson

Ask them to confirm whether it's 'share of freehold'.

hazyjo

Leasehold houses are common in some areas in the North. Wouldn't have expected Redditch to have loads, but you might want to do some research.


Just googled 'Redditch leasehold houses' and not sure if this applies https://www.lawgazette.co.uk/news/a-new-lease-of-life-leaseholders-in-redditch-are-facing-problems-due-to-the-variable-rent-review-clauses-in-their-leases/19958.fullarticle


Can't read or absorb it at the mo as tbh it bored me to sleep, but you might want to see if it's relevant.


I agree the EA is talking a load of crap! Of course you might incur costs, and I have never heard of a lease that extends itself! And they put this in writing??!! Jeez...


Jx

*~Zephyr~*

Just a thought, but that house is significantly extended - almost doubled in size.

If the Freeholder is "absent", how did they get permission to do the extension?

Typhoon2000

Live in a 1990s development in London which is a mixtures of flats and terrace semi houses. All are leasehold with no ground rent. We are responsible for building insurance and do have to pay a small service charge for estate cleaning and lighting. Some people have bought the freehold using the statutory scheme. Seems the norm for these types of developments around here.

jansus

We are due to complete on our house next week and its a leasehold with 879 years remaining on the lease, which i think will see me out! It's very common here in the North for houses to be leasehold. Doesn't worry me at all.

Richard_Webster

It is quite common for the freeholder to be missing. Typical scenario is that someone owns the freeholds of a number of properties and dies. Family wonder what it is all about and discover they can collect say £3 per year from each house. Decide it is not worth collecting and just forget the whole thing.

If the family were switched on they would sell freehold to some nasty property company who would try to collect large fees for agreeing alterations (if the lease requires freeholder's consent). Sometimes it is a good that they aren't switched on!

Your solicitor will need to look at the lease to see how restrictive it is.

Prior to WWII it was common for a builder to build for renting. Hwe would appraocj a landowner and but say 4-6 plots and build houseds on each plot. They would all be in one lease - the ground rent would be say £2-£5 per plot so the total payable would be an appropriate multiple of that. In that sort of case you would only get part of the lease when you buy the house.

In Southampton we have some large areas that were leased off in the 1860s for 1,000 years for use as brickyards. The ground rent for each area was 1/- per year plus 6d for every 1000 bricks burnt on the land. Nothing in the leases about building or not building.
Hundreds of houses have been built on each piece of land. You either got a part of the 1000 year lease, or the developer having acquired part of the leasehold area himself, then granted a 999 year lease for each house built. The original lessor was a member of a local landed family but they now deny knowledge of these leases.

So there a variety of situations and you can find some leases are very restrictive about things like alterations, others say nothing.