Freehold Purchase Breach Of Contract

BADGER101

Hi guys,


I'm hoping somebody may be able to help me with a bit of a messy contract issue we're experiencing.


We purchased our new build house in May 2016. This included a non adjoining garage below a coach house.
The contract we signed was for a freehold property with a non adjoining garage. No mention made of any leasehold implications.
12 months after purchase our solicitor contacted us to say that the developer had contacted them to say that the garage hasn't been registered yet as it is a leasehold property and therefore wasn't registered under the freehold of our house.
I understand that it would be impossible to own the freehold to the garage as it splits the footprint of the freehold owned by the coach house owner. Our issue is that the developer is in breach of contract as we signed the contract stating that the house and garage were both being sold as a freehold.


Has anybody had any experience with an issue like this?
Our specific interest is how much (if at all) the value of the property may be decreased with the garage being a leasehold (did we over pay)?
Also, has anybody pursued compensation from their developer or developers solicitor. We've been asked by our solicitor what kind of ballpark figure we would like to claim for but we have no idea what is sensible in this instance....


Any help would be very much appreciated!
Cheers

Guest101

Uhm, surely you should be pursuing YOUR solicitor?

G_M

So when you looked through the Title and Plan of the freehold house and noticed that the garage was not included, what did you ask your solicitor, and what did he reply?

Did he even know you were hoping to buy the garage along with the house? If you didn't tell him, he wouldn't have known.

eddddy

BADGER101 wrote: »

Our specific interest is how much (if at all) the value of the property may be decreased with the garage being a leasehold (did we over pay)?
Also, has anybody pursued compensation from their developer or developers solicitor. We've been asked by our solicitor what kind of ballpark figure we would like to claim for but we have no idea what is sensible in this instance....

I guess it depends on the terms of the lease you are being offered on the garage.

For example, if it's...

• a 999 year lease
• peppercorn ground rent
• no onerous restrictive covenants
• no admin fees payable
• a 'sensible' method of apportioning insurance, maintenance and repair costs

... you're probably no worse off with a leasehold instead of a freehold.

But bear in mind that you don't get all the statutory protection when you lease a garage, that you get when leasing a house or flat. (e.g. You have no statutory right to extend the lease.)

kingstreet

It's typical on a coach-house flat for the flat owner to have the freehold and the garages to be leasehold.

You should have been told about this at the outset as the alternative would have been an unmortgageable flat as it would have only a 'flying freehold'.

Nil out of ten for builder for suggesting otherwise and negative brownie-points for your solicitor for letting this get through.

BADGER101

G_M wrote: »

So when you looked through the Title and Plan of the freehold house and noticed that the garage was not included, what did you ask your solicitor, and what did he reply?

Did he even know you were hoping to buy the garage along with the house? If you didn't tell him, he wouldn't have known.

The garage was included and noted as being a freehold purchase along with the house. Hence we purchased the house on the basis of house and garage both being freehold.

eddddy wrote: »

I guess it depends on the terms of the lease you are being offered on the garage.

For example, if it's...

• a 999 year lease
• peppercorn ground rent
• no onerous restrictive covenants
• no admin fees payable
• a 'sensible' method of apportioning insurance, maintenance and repair costs

... you're probably no worse off with a leasehold instead of a freehold.

But bear in mind that you don't get all the statutory protection when you lease a garage, that you get when leasing a house or flat. (e.g. You have no statutory right to extend the lease.)

Thanks for this. It offers some comfort as it's a 999 year lease and the fees/covenants/insurance aren't in any way expensive or onerous.




The fact that our solicitor missed this issue when reviewing the contract is being pursued as a separate matter.

eddddy

BADGER101 wrote: »

Thanks for this. It offers some comfort as it's a 999 year lease and the fees/covenants/insurance aren't in any way expensive or onerous.

As with any lease, it's useful to consider a number of scenarios; and see how the lease deals with them; and see if you would be happy with the outcome.

For example,

If the roof of the coach house starts leaking (and maybe not affecting your garage), what proportion of the cost of repairs would you have to pay?

When all the windows frames in the coach house need painting (or perhaps need replacing) will you have to contribute to the cost?

If you want to make alterations, for example, install an electric garage door or an external alarm box, will you need consent from the freeholder, and will you have to pay a fee?

If the coach house occupant makes lots of buildings insurance claims, e.g. for overflowing baths, chip pan fires, cigarette fires, will you end up with much higher insurance costs?