Freehold house, leasehold garage - sign disclaimer?

vaughanie89

Hi. Me and my partner are in the process of buying a 3 bed semi which also includes a leasehold garage located a bit further up the road below a flat. The lease is for 999 years with a £1 per year fee and my solicitor has been provided with the details of the lease. We are now close to exchange but for weeks we seem to have been held up waiting for (as far as I am aware) buildings insurance details of the person that owns the flat above the garage - to satisfy our lender. We are in contact with our vendors who have been chasing the owner of the flat above the garage, and they keep assuring them that the requested details have been sent to our solicitor. However we seem to be at the point now where we feel that the freeholder above the garage may have no intention of providing the details needed for our purchase to progress (and why should they? It will hardly be on their list of priorities!). Our solicitor has told us that the information required is in accordance with the cml handbook that lenders adhere to, but with our instruction, could proceed with the purchase as long as we get approval from our lender and also signed a disclaimer to cover the solicitors firm against any claim that could arise due to the lack of information being provided.

If we choose to proceed and sign the disclaimer, what type of risks would we be leaving ourselves open to? We don’t want to complete our purchase after signing the disclaimer, only to regret it a few years down the line if we ever come to sell and encounter problems.

I understand that the procedure must be there for a reason, but we just need to hear in layman’s terms what the possible ‘nightmare’ scenarios could be if we do bypass this element of the purchase and sign the disclaimer. We would also be interested to hear if anyone else has been in a similar situation and what they chose to do? Thanks in advance for any replies!

davidmcn

vaughanie89 wrote: »

I understand that the procedure must be there for a reason, but we just need to hear in layman’s terms what the possible ‘nightmare’ scenarios could be if we do bypass this element of the purchase

That's what you're paying your solicitor to advise you about. Haven't they explained to you?

Really not sure why they need a "disclaimer", though it's wise for them to get it in writing if you're going to proceed with an action which they advise you against.

anselld

The freeholder is presumably responsible (under the Lease) for insuring the building containing the garage.

So the consequences are that it may not be insured. You may not be covered if the garage burns down for example. Worse still you may be liable for the garage and the flat above if for example your car ignites whilst in the garage.

The mortgage company will probably not accept your disclaimer anyway, but personally, I wouldn’t sign it. The vendors need to get tough with the Freeholder. Why should they?... because they are obliged under the Lease.

franklee

This seems to be a common setup in new builds round here.

When I was a tenant I was renting a freehold house that had a leasehold garage under a so called coach house. The other two garages were owned one by the coach house freeholder and the other by a neighbour whose garage was leasehold too.

My understanding was that the coach house owns the freehold to the garages and is responsible for insuring them. In theory they could pass the cost of this insurance onto the other garage owners pro-rata. The risk if it wasn't insured is presumably the flat burning down and the garages damaged. Unlikely a fire would start in the garages as they weren't allowed any electricity (so pitch dark on winter nights).

Presumably your own contents insurance would cover theft from the garage?

Suggest you talk to your household insurer see what they make of it and what if anything they will cover the garage for.

Surprised your mortgage lender is OK with it if no insurance so double check that.

Don't like the setup TBH.

davidmcn

It's possible that the lender wouldn't be all that bothered about the garage anyway - depends how much value it adds (and how much that matters for the LTV percentage).

mailmannz

Firstly, don't buy a freehold house with a leasehold garage!!!

Secondly, all the information you are waiting for should be provided by the estate service managers. This is up to the vendor to sort out (and will cost them money!).

Thirdly, you will have to deal with Ground Rent companies and these guys make used car salesmen look like angels!!!

Forth, DONT BUY FREEHOLD HOUSE WITH LEASEHOLD GARAGE!!!

eddddy

mailmannz wrote: »

Firstly, don't buy a freehold house with a leasehold garage!!!

Do you have any particular reason for offering that advice?

mailmannz wrote: »

Secondly, all the information you are waiting for should be provided by the estate service managers. This is up to the vendor to sort out (and will cost them money!).

From the OP, it sounds like the owner of the flat above the garages is responsible for insurance. So it's up to the flat owner to provide insurance details.

mailmannz wrote: »

Thirdly, you will have to deal with Ground Rent companies and these guys make used car salesmen look like angels!!!

If the owner of the flat above is responsible for insurance, they might also be the Freeholder, so Ground Rent would be payable to them. From the OP, it sounds like the Ground Rent is £1 per year.


But I agree it's a bit worrying that the Freeholder isn't being cooperative - it's not a good sign, should any issues need resolving in the future.

It's possible that the reason is they are just an "average flat owner" who hasn't really got to grips with the responsibilities of being a freeholder.

hazyjo

I had a newish house with the same set-up (separate 2 garages with flat over), but I had to pay a service charge for grounds which included insurance for the 2 garages. It's pretty common - I wouldn't say it's reason to avoid buying.


(Probably) worst case scenario, what would happen if your car caught fire, or something exploded, while in the garage beneath their flat? You need to make sure the garage is insured and that the necessary cover is in place (they would need their insurance for the flat, but what happens if there was injury/death to someone?! Lots to consider).


Be aware that when/if you ever sell, you may have to pay several hundred for a management pack from the freeholder/management company. Have the sellers had to pay do you know?