All Fallen Through - It's complicated!

jlwhite

We purchased our new build shared ownership house in 2015 (50% share). Within the leasehold title there is a restrictive covenant that states the house has to be offered back to the housing association for first refusal at sale for a period of 21 years.

We then in 2017 staircased to 100% and bought the freehold (this also has the restrictive covenant). There was a problem with our (useless) solicitors not finishing registering the title which they told us about 6 months later and it all finally came through as registered and finished in August this year (more than a year after staircasing).

We decided to put our house on the market and found a house we love. The Vendors were buying a new build Persimmon Home with a help to buy mortgage on the property they own (and I believe on the one they were buying) which meant they couldn't do a direct Part-Exchange with Persimmon as it's not allowed on HTB. They mentioned the possibility of a chain-break where Persimmon buy our house to allow us to buy theirs and them buy the new build. We agreed on prices which we were all happy with and agreed to a 28 day completion deadline which took us to 21st December.

The solicitors manged to get everything ready for exchange and completion last week and then on Thursday (20th) Persimmon pulled out of the deal. The reason they gave is that there are two titles on our house and because of the restrictive covenant. We are all obviously devastated as we thought maybe we might not meet the deadline but didn't see this coming.

I had approached the housing association via email earlier in the year to check how it works with offering them first refusal and they told me they were not buying back properties and we could go ahead and sell on the open market. I clarified this again when we entered into this chain and forwarded that information on to our solicitor. The housing association could have issued a certificate of compliance to state that our solicitor had done everything right but Persimmon wouldn't accept this and wouldn't wait for it to get sorted out. They pulled from everything including the vendors being 'allowed' to buy their new home.

My question is does anyone know how we get this issue with two titles sorted and should we have been advised that this could cause problems with future sales either by the original solicitor when we first bought the house, or the one we used when staircasing, or our solicitor this time when she first ordered the titles (they never mentioned and we never realised there would be two)

As well as getting this sorted we also have the problem that part of the part exchange 'deal' is that they can market the house and do viewings etc. before exchange of contracts so they have had it on rightmove for £5000 less than they were paying us for it. We have obviously got them to remove it now but we aren't going to have much luck selling it for asking price in the new year I guess.

We have all lost a fair bit of money and sleep in all this and definitely learned some expensive lessons for when we do eventually decide to try again but any advice on the title thing would be much appreciated thanks!

ThePants999

What a lot of words - let me save the next reader some time by trimming it down to the relevant bits.

jlwhite wrote: »

We purchased our new build shared ownership house (50% share)

We then in 2017 staircased to 100% and bought the freehold

We decided to put our house on the market

Persimmon pulled out of the deal. The reason they gave is that there are two titles on our house

My question is does anyone know how we get this issue with two titles sorted and should we have been advised that this could cause problems with future sales either by the original solicitor when we first bought the house, or the one we used when staircasing, or our solicitor this time when she first ordered the titles (they never mentioned and we never realised there would be two)

My answer: ask your solicitor.

da_rule

If you now own the freehold title then the leasehold title should be able to be closed off and merged with the freehold title. However, the restriction may then be transferred to the freehold title.

Depending on the wording of the restriction you’ll probably need a certificate from the Housing Assocation to say that they don’t want to purchase it. What Persimmon are probably worried about is that the certificate will be addressed to you. They wouldnthen potentially have to get a certificate themselves to sell it on.

HouseBuyer77

If the housing association don't want to buy better to get that covenant removed altogether.

jlwhite

Apologies for using too many words

Which solicitor should we be asking?

Should we have been advised that this could cause problems with future sales either by the original solicitor when we first bought the house, or the one we used when staircasing, or our solicitor this time when she first ordered the titles (they never mentioned and we never realised there would be two)

AdrianC

The HA have said they aren't interested in buying-back now.

But Persimmon won't be keeping the place long - they're buying for resale, simply to make your chain go through more easily, so that they can sell a newbuild. What they're concerned with is whether the HA will change their mind tomorrow, and insist that Persimmon sell back to them.


As has been said, there are two titles because there's two things being sold.

One title is for the leasehold property that you originally bought 50/50, then staircased to 100%.
The other title is for the freehold. You own both, so you are both freeholder and leaseholder. You could cancel the lease.

Tiglet2

As da_rule says above, when you staircased up to 100% and bought the freehold title, the leasehold title should have been closed and merged with the freehold title, which would then give you one (freehold) title. If the solicitor you used when you did this didn't register it correctly, that may explain why you still have two titles. Originally when you first purchased the property you bought the leasehold title (as it was a shared ownership property). The freehold title was owned by the landlord (be that the developer/managing agent). So at that time you had one (leasehold) title. Now that the property is no longer leasehold (after staircasing), the leasehold title should have been closed and therefore no longer registered as a separate title at Land Registry. Instead you should have been sent the freehold title following registration of 100% staircasing.

This needs to be corrected. You can either go back to the solicitor who carried out the 100% staircasing or the solicitor you are currently using for the sale to get the Land Registry to amend the title. Both ways will take some time however and it sounds as though Persimmon do not want to wait - the amended title will then need to be registered in their name so that they can sell on. You may have a case for complaint against the previous solicitor, but it would have to be investigated which will also add time to the transaction.

jlwhite

I get why Persimmon don't want it, I get that there are two titles and why and that it can be sorted out but it has cost us money and we should have been advised by a solicitor at some point that this could cause problems with re-sale.

My question is which solicitor should have pointed this out?

jlwhite

Thanks Tiglet2, we were sent the freehold title after staircasing which was why we never thought the leasehold would still be in place. The solicitor we used was QCAS (Shulmans) after getting a mortgage with solicitors fees included (another lesson learnt there!). Hopefully it wont take months to sort out!

AdrianC

jlwhite wrote: »

I get why Persimmon don't want it, I get that there are two titles and why and that it can be sorted out but it has cost us money and we should have been advised by a solicitor at some point that this could cause problems with re-sale.

My question is which solicitor should have pointed this out?

None of them.

The only reason this is "causing a problem" is because the buyer don't really want your house that badly.


The solicitor that acted for you during your original SO purchase did nothing wrong.
The solicitor that acted for you during your staircasing did nothing wrong.
The solicitor acting for you now is doing nothing wrong.

If you want to go down to one title, because you think it'll make a future sale "easier", then you can get that done yourself. It's almost certainly not your deal-breaker here - the covenant is.

Persimmon are under no obligation to buy your house - they offer a scheme that might have helped, but no more than that. What do the Ts & Cs of the advance-marketing contract you signed with them say about them pulling out?

Bossypants

Any solicitor could hypothetically get this fixed, it doesn't matter who originally made the mistake. Try to find a competent, responsive solicitor to do it, then go back to them for any future conveyancing needs you have. You're better off developing a longterm relationship with someone good than finding someone new every time you need conveyancing work done.