Leasehold headache - missing lease

gellitripping

Hello - first time buyer, first time poster!

We’re currently in the process of buying a leasehold ex-local authority flat in London. No chain - it was tenanted but is currently vacant. We’ve cleared every hurdle (mortgage offer, survey, etc) but have now come up against a massive headache with a missing lease.

The vendor and solicitor have been messing our solicitor around about the lease since the beginning of February, sending the wrong documents, ignoring requests etc. Every other enquiry has been settled. We found out yesterday (after the vendor’s sol sent a lease with several pages missing) that the vendor’s do not have complete copy of the lease. The borough council also do not hold a copy and it is not with the land registry. They want us to use a neighbouring flats lease (!) and indemnity insurance. Our solicitor has advised strongly against this and it seems like we won’t be able to mortgage on it at all anyway.

Our solicitor is asking for a surrender and regrant. Our vendor seems very reluctant to do this but it seems like the only option. Does anyone have any experience of this and how long it takes? He is unwilling to because it will add time to the process. However if he walks away he is in the same pickle just two months further down the line. I suspect his sol isn’t very experienced/fixed fee. We have no doubts about the quality of our sol because she is a family solicitor.

We suspect that the vendor was a cash buyer who bought at bankruptcy auction. There is no mortgage on the property so the lease can’t be found there.

Incidentally we planned to apply for a lease extension in two years when we are able to give notice. Has anyone ever negotiated this before sale with an owner? Unlikely but he may be amenable if we offer to cover costs.

We’re very keen on this flat so very disappointed with this development, especially as it feels that the vendor/sol have waited until we are so invested in the process (we’ve spent about £2000 so far) that we won’t walk away.

m0bov

What on earth have you spent £2k on?!
How did the vendor buy it if there was no lease? What about the freeholder or agents, can they help?

gellitripping

Fees for the mortgage application, mortgage broker and the solicitor add up to about that. Our solicitor isn’t a no win/no fee style solicitor which was a risk worth taking because we knew she was very good. Unfortunately as I mentioned the vendor’s have really pressured us to move forward with a quick sale but have revealed this at the last minute. Freeholder is the London Borough Council but they don’t have a copy. Apparently missing/incomplete leases sometimes pop up in auction sales.

bouicca21

I had the same problem on the flat I bought some 5 years ago. The solution was to obtain cast iron guarantees from the freeholder that a new lease would be issued and that the vendor would pay all costs, which were put as an allowance against the purchase price. It was fairly clear that all the leases on flats in the building were pretty well identical and that it would not be much of a problem to put a new one together in the same terms as the original.


Whether your mortgage company would accept that is a different matter.


PS You have checked whether the land registry holds a copy?

Cakeguts

bouicca21 wrote: »

I had the same problem on the flat I bought some 5 years ago. The solution was to obtain cast iron guarantees from the freeholder that a new lease would be issued and that the vendor would pay all costs, which were put as an allowance against the purchase price. It was fairly clear that all the leases on flats in the building were pretty well identical and that it would not be much of a problem to put a new one together in the same terms as the original.


Whether your mortgage company would accept that is a different matter.


PS You have checked whether the land registry holds a copy?

Was the flat you bought an ex local authority one?

Cakeguts

Does the flat appear to be "good value for money?" Is it cheap for what it is? Is it cheap for where it is?


Something that looks cheaper than it should be is always an indication of a big problem with it.

gellitripping

The flat is ‘good value for money’ (the low end of budgets for an outer zone of London) but not so fantastically cheap to arouse suspicion. To put it in perspective we viewed three in the exact same price range on the same day but we preferred this flat of the three based on its advantages (size layout location) and the compromises we were willing to male (distance from train station, new kitchen bathroom boiler etc needed).

gellitripping

Thanks for sharing your experience bouccia21. I’ve heard via our ea that the vendor thinks our solicitor is being a stick in the mud about the indemnity insurance but my main concern is that the lender won’t lend without a lease so that whole chain of argument is a moot point.

Lioness_Twinkletoes

bouicca21 wrote: »

PS You have checked whether the land registry holds a copy?

gellitripping wrote: »

The borough council also do not hold a copy and it is not with the land registry

Message too short

bouicca21

No, not council, but that should make no difference. I was also subjected to strong arming tactics from the vendor and his EA, who insisted there was no problem and my solicitor was being overly cautious. They caved in the end, as they eventually realised they would have the same problem with any other buyer.


As my solicitor pointed out, without a lease you can have no idea of what your obligations are or what are the obligations of the freeholder.



The solution was remarkably simple, once the vendor woke up to reality.

gellitripping

thanks Bouccia21, that’s very encouraging. The vendor hasn’t had a lot of goodwill towards us so far, and I think they are playing hardball with us to make it seem like we are being difficult/overly cautious.