Leasehold charges...

gardian8

We have just had the completion statement from our solicitors back for the house we are buying which is (hopefully) in the last stages.

There is a charge for HomeGround administration fee and HomeGround Search fee these are only about £300 for both, but these were not on the original estimate so I asked about it.

I have just got an email back from the solicitor's PA stating "As the property is Leasehold these are the Freeholders fees for providing the required paperwork in order to register the property in your name and their associated administrative costs in respect of the change of ownership"

The thing is, the current owner has bought the freehold in September last year so she now owns both the Freehold and the Leasehold and my solicitor was in the process of merging the 2 titles to become 1. I was under the impression we would be buying the freehold only as that is what the house currently is.

Before I go back to them, I wanted to ask on here to see if I have got this wrong, so any advice on this please? is the property only a freehold IF the 2 titles are merged? am I buying a freehold or leasehold (or both)

Thanks

G_M

Either it is a mistake, or..... currently there are separat lease and freeholds. If the seller owns the freehold, I asume they employ Homeground to manage it?


The merging of the two Titles will happen only once you have Completed.

gardian8

There was nothing in the lease title about homeGround having an interest in the lease. The seller had bought it and had it in her name, we are buying both titles from her i think, Is this where it comes in?

Thanks

rachel230

Be careful to get this right. Buying some properties especially leasehold can be a minefield and you really ought to use a specialist leasehold solicitor who should be well versed in any questionable clauses as they can be almost impossible to understand by ordinary Joe Public.
Make sure the house is true freehold (free from ANY hold) and not fleecehold which is not true freehold.
The National Leasehold Campaign Facebook group is full of helpful information.

eddddy

rachel230 wrote: »

Make sure the house is true freehold (free from ANY hold) and not fleecehold which is not true freehold.

Just to be clear, 'fleecehold' is a made-up word. So don't use it in communication with your solicitors.

Back to your question... is there any part of the property which is still leasehold? For example, a garage in a separate area, maybe in a block of garages?

(As rachel230 suggests, even though the property is freehold, you should make sure you understand your liability for charges for maintaining roads, parking areas, and communal spaces etc.)

gardian8

I have managed to get in touch with the PA and asked about the charge. He insisted it was because I was buying a leasehold property which I dont think I am as the seller had bought the freehold to it last year. He is now going to speak with the solicitor after checking the file as he thinks I may be right. See what happens

We (as far we know) are buying the house as a freehold and the leasehold to the land, which my solicitor is trying to merge so nothing seems out of place. Will update once they get back to me

eddddy

gardian8 wrote: »

We (as far we know) are buying the house as a freehold and the leasehold to the land, which my solicitor is trying to merge so nothing seems out of place.

That's not really an accurate description. It's more like this:

• The freeholder owns the house and land in perpetuity (i.e. forever).

• But the freeholder has granted a lease, maybe for 125 years. So the leaseholder has the right to use that house and land for 125 years.

• The freeholder has no right to use the house and land for 125 years.

• After 125 years, the leaseholder has to move out and give the house and land back to the freeholder.

• The leaseholder has to pay ground rent, and follow other 'rules' listed in the lease for those 125 years.

You're buying both the freehold and leasehold, so your solicitor will extinguish (or merge) the lease.

So you'll then have the right to use the house and land in perpetuity (forever), and you won't have to pay any ground rent etc.


Edit to add

UNLESS... you're saying that your also buying the leasehold of something else, like a garage, for example.

gardian8

Eventually got an update from the solicitors office. This charge was for a deed of covenant which we had to sign, which I am lead to believe binds us the the original terms of the lease as when my seller bought it. This is a one off charge so nothing to worry about, but I did have a moan about the almost 300 quid for a form to be filled in...

Almost there with enquiries so will be worth it when we are in.

eddddy

gardian8 wrote: »

Eventually got an update from the solicitors office. This charge was for a deed of covenant which we had to sign, which I am lead to believe binds us the the original terms of the lease as when my seller bought it. This is a one off charge so nothing to worry about, but I did have a moan about the almost 300 quid for a form to be filled in...

And I guess you've read and fully understood those terms, and you're happy with them...

They probably relate to things like you agreeing to pay for the upkeep of common areas, and maybe the roads etc.


Ironically, as a freeholder you will have fewer legal rights than your leaseholder neighbours, if you want to challenge those fees etc.

gardian8

It was more the things like I can't sell the leasehold without selling the freehold at the same time. There are no ongoing fees for maintenance, thankfully.