Absent Freeholder / Missing Head Lease (House)

mr.uzy

HI,
hope you are all well, and thanks in advance for your help.

Some context...
I am in the process of purchasing a property which the agent had informed me was a Freehold, however following searches it has become apparent that its is actually a long lease hold (999 yrs).

There is also the issue of a missing landlord & missing head lease.

As a result my solicitor has asked the vendors solicitor to provide;
- Absent Landlord Indemnity Policy
- Superior Lease Indemnity Policy for the missing head lease

The vendors solicitor has agreed to both the above policies. I am now waiting to see if this fulfils my lenders requirements... fingers crossed!

Questions

1. Do you imagine this situation would be a burden when I sell the property in the future, as its quite a messy title! / Would future lenders / buyers avoid this?
2. is it worth purchasing the Freehold?
3. Could this be grounds for renegotiating the price I agreed to purchase for?
4. Let's say I wanted to extend the property, who would I seek permission from?

Appreciate any support on this matter.

Thanks

davidmcn

mr.uzy wrote: »

1. Do you imagine this situation would be a burden when I sell the property in the future, as its quite a messy title! / Would future lenders / buyers avoid this?

Some might, but if the risk is insured it shouldn't be much of a problem.

2. is it worth purchasing the Freehold?

You can't purchase the freehold, because the freeholder is missing.

3. Could this be grounds for renegotiating the price I agreed to purchase for?

Only to the extent that the fact it's leasehold makes a difference. Though I'm guessing with a 999 year lease that the value is virtually the same as freehold.

4. Let's say I wanted to extend the property, who would I seek permission from?

You can't get permission from the freeholder, because the freeholder is missing. The insurance (probably) covers you for the fact that you haven't been able to get permission.

Probably worthwhile you having a chat with your solicitor to help you understand this better.

Slithery

davidmcn wrote: »

You can't purchase the freehold, because the freeholder is missing.

I thought that in cases like this it was possible to purchase the freehold - the government holds onto the money to reimburse the freeholder if they ever materialise with a valid claim.

ACG

I have come across a few of these, not many but I will answer your questions...

1. Do you imagine this situation would be a burden when I sell the property in the future, as its quite a messy title! / Would future lenders / buyers avoid this? - Every one I have come across has gone on to complete. The applicants want the house and the lenders are happy to lend with the indemnity policies in place.
2. is it worth purchasing the Freehold? Who would you buy it from? Nobody knows who/where the freeholder is
3. Could this be grounds for renegotiating the price I agreed to purchase for? Possibly, but it does not usually affect the valuation. How do you quantify any reduction as an insurance policy will protect you.
4. Let's say I wanted to extend the property, who would I seek permission from? Im not sure but presumably the council where applicable.

Tom99

[FONT=Verdana, sans-serif]The current consultation paper on leasehold reform recognises the difficulty with missing freeholders:[/FONT]

“[FONT=Verdana, sans-serif]The procedure for dealing with “missing landlords” is complex and almost[/FONT]
[FONT=Verdana, sans-serif]impossible for leaseholders to follow. In some cases, the cost of trying to locate[/FONT]
[FONT=Verdana, sans-serif]a landlord, and applying to the county court for a vesting order107 if he or she[/FONT]
[FONT=Verdana, sans-serif]cannot be found, can exceed the price to be paid for the interest claimed.”[/FONT]

[FONT=Verdana, sans-serif]It is likely that when any new legislation is passed it will make it easier to deal with the missing freeholder problem.[/FONT]

mr.uzy

Thanks All,

My biggest fear was marketability in the future, however as you have suggested if the lenders ar willing to lend with indemnity in place then probably no reason to worry...