Headlease issues advice please

neil_pent

Hi all,

Will try to keep this as simple as possible. We are in the final stages of selling our flat that we have owned for 3.5years - no documentation has changed since we bought it (and remortgaged earlier this year). We have an issue where the buyers solicitor will not proceed unless the headlease title register is transferred - details as follows...

1. Individual A = Freehold title
2. Company B (dormant company) = headlease/Leasehold title
3. Couple C = (me & my wife) underlease/leasehold title
4. Company D = 3rd party that now owns 100% of Company B's shares

Ground rent has never been collected. We got in writing from Company D (on behalf of company that no backdated ground rent will be collected up until this year.

However, because the title register is still in company B's name, they will not proceed with exchange unless this is transferred to Company D that owns 100% of their shares.

Does the fact that Company B are a dormant company have any bearing on this issue? We are at a stalemate and neither our solicitor or a 3rd party solicitor can see any prejudice to our buyer (there is a clause in the headlease to vonfirm and has been shared to our buyers solicitor).

Any help/guidance would be so helpful.

Cheers,

One frustrated seller.

eddddy

neil_pent wrote: »

We have an issue where the buyers solicitor will not proceed unless the headlease title register is transferred

Are you sure that the buyer's solicitors won't proceed? (i.e. They see a legal reason why they cannot proceed.)

Or is that the buyers won't proceed, based on something their solicitor has advised them (perhaps overreacting, or misunderstanding what the solicitor said)?

Or is it the mortgage lender that is refusing to proceed?


Is it perhaps an issue with building management/maintenance? Who manages/maintains the building, if the company that owns the headlease is dormant?

G_M

Presumably management/maintenance is undertaken by Individual A, unless A has employed Management Company E to do it on his behalf?

I don't know about company take-overs, but if B were a deceased person, an D was the Beneficiary of B's will, then there would be no need to actually transfer the Title provided the death certificate/will/probate documents were produced.

I don't see why the same would not apply under company law......

eddddy

G_M wrote: »

Presumably management/maintenance is undertaken by Individual A, unless A has employed Management Company E to do it on his behalf?

I don't see how that can work.

Couple C have no relationship (i.e. lease) with Individual A.

Couple C only have a relationship (i.e. a lease) with Company B.

So no covenants (e.g. to maintain the building, collect service charges) exist between A and C.

Covenants can only exist between A and B, as well as between B and C.

So if Individual A maintains the building, they have no way of enforcing the collection of the service charge from Couple C...

...except by using Company B as a 'middleman'. But Company B is dormant, so cannot do any financial transactions.

neil_pent

Apologies i forgot this amongst the confusing details...our flat is managed by Company E - a RTM company formed of the flat owners (tenants). This company collects service charge and arranges building insurance etc.

The buyer really wants the flat but the solivitor will not proceed without the transfer of title from B to D. Company B is named in our lease along with Company E. They mentioned something about a tri-party lease but this was closed out uaing a clause in the lease that there is no prejudice to the tennant.

I wondered if it may be something to do with the mortgage but what could their grievance be? Company B have been silent for about 15yrs with all management etc through company E.

We have provided proof that Company B is now a dormant company under company D including emails from D confirming the same.

Thanks all, we are approaching the 7th month of this saga and have a chain of 5 above us...hanging like a thread!

eddddy

neil_pent wrote: »

They mentioned something about a tri-party lease but this was closed out uaing a clause in the lease that there is no prejudice to the tennant.

So that does sound like the buyer's solicitor may be concerned about building management/maintenance etc.

With a tri-party lease (i.e. a lease with 3 parties), the parties are usually the leaseholder, the head leaseholder (in this case) and the management company.

The tri-party lease gives the management company a legal obligation to manage the building.

neil_pent wrote: »

...our flat is managed by Company E - a RTM company formed of the flat owners (tenants). This company collects service charge and arranges building insurance etc.

That might all be working fine at the moment, but given the suggestion of a tri-party lease, there may be a problem with enforcing that legally.

e.g. If the RTM company decides to refuse to do repairs, or a leaseholder refuses to pay a service charge - there's no way of 'forcing' them to.

But TBH, I'm not sure how the head leaseholder being a dormant company makes any difference to that.