Buying flat with unregistered lease

thomasccp

I am buying a flat in London. It is a share of freehold property in a Victorian building. The problem is specifically related to an unregistered lease.


7 years ago the seller acquired the freehold and created a new 999 years lease. However, the owner forgot to sign a document and the new lease remains unregistered.


My solicitor cannot proceed until the lease is fully registered with land registry. The seller proposes a conditional exchange which means that the transaction only complete after the lease is successfully registered. However I suspect my mortgage lender will have a problem with that.


Shall I just give up? Is there a way to proceed while minimising the risk?

Slithery

Get your vendor to sort it before exchange - they're going to have the same problem with the next purchaser even if you do pull out so it's in their best interests to get it sorted ASAP.

thomasccp

As far as I know the registration will take a few months. The seller is worrying that we might pull out. Is the conditional exchange a silly idea? Is there any indemnity insurance?

davidmcn

Your lender won't care about exchange being conditional, what matters is whether their offer will still be valid whenever completion is triggered.

G_M

Is your solicitor acting for the lender as well as you?


Why not pop in and ask him?

thomasccp

Slithery wrote: »

Get your vendor to sort it before exchange - they're going to have the same problem with the next purchaser even if you do pull out so it's in their best interests to get it sorted ASAP.

davidmcn wrote: »

Your lender won't care about exchange being conditional, what matters is whether their offer will still be valid whenever completion is triggered.

G_M wrote: »

Is your solicitor acting for the lender as well as you?


Why not pop in and ask him?

My solicitor says he won't proceed until he receives a registered lease and cannot give any more comment. I am not sure if he is being very cautious or just inexperienced.


The seller suggests this conditional exchange... which sounds reasonable but is basically refused by my solicitor.

- If the seller fails to register, I can walk away.
- If the seller manages to register before my mortgage expires, completion is triggered.


One thing is not considered though: if the seller manages to register but my mortgage expires, I will have no money to complete.

davidmcn

thomasccp wrote: »

One thing is not considered though: if the seller manages to register but my mortgage expires, I will have no money to complete.

So you agree a longstop date in the contract enabling you to walk whenever you reach the expiry of your mortgage offer. Same as you normally would when buying a newbuild property if nobody's certain how long construction will take.

eddddy

thomasccp wrote: »

One thing is not considered though: if the seller manages to register but my mortgage expires, I will have no money to complete.

Yes - it's considered here:

thomasccp wrote: »

- If the seller manages to register before my mortgage expires, completion is triggered.

(If this is your concern, I suspect the solicitor means "If the seller manages to register 10 days before my mortgage expires, completion is triggered". To allow 10 days leeway for completion.)

thomasccp wrote: »

My solicitor says he won't proceed until he receives a registered lease and cannot give any more comment. I am not sure if he is being very cautious or just inexperienced.

What kind of a solicitors are they? How did you find them?

If they're a 'conveyancing factory' they may refuse to do anything non-standard.

thomasccp

eddddy wrote: »

What kind of a solicitors are they? How did you find them?

If they're a 'conveyancing factory' they may refuse to do anything non-standard.

I found them on reallymoving.com and they had good reviews. I think you are right, they are sort of convenyacing factory which was fine with my previous sale....

Now I am kind of stuck as they refuse to proceed. The other solicitors do not want to take over since it is non-standard and in an advance stage of the process.

steampowered

I don't think a conditional exchange is a good idea.

You have no control over how long registration of the lease is going to take. There could be unforeseen problems.

The fact that the vendor failed in this extremely basic and legally required task 7 years ago doesn't give me confidence that they'd sort it out quickly this time.

You also have no guarantee that your mortgage offer will still be valid once the lease is registered - which would mean forfeiting your deposit, if the lender is not willing to lend when this finally get sorted.

I totally agree with your solicitor. You shouldn't commit yourself to buying this property and putting down a deposit until the lease is registered. Right now the vendor is not in a proceedable position. You can exchange AFTER the lease has been registered.

thomasccp

steampowered wrote: »

I don't think a conditional exchange is a good idea.
You also have no guarantee that your mortgage offer will still be valid once the lease is registered - which would mean forfeiting your deposit, if the lender is not willing to lend when this finally get sorted.

Thank you, I can see the risk here. Would it be more managable if I add the following?
- If the seller cannot get the lease registered before my mortgage offer expires, I can get my deposit back,