Property purchase issues

Carlsson7

Morning, apologies for the long winded post. Just after some advice and a different perspective on this situation.

Property purchase 250k, built in the 1920s.

I am in the 10th week of purchasing a house and the searches and contracts have come back via the solicitors.

The property I wish to purchase is on leasehold land, term 999 years (which is fine). However adjacent to the property is a plot of land big enough for a detached house to be built on that is freehold and comes with the purchase of the property.

The problem is that within the freehold is a conveyance from 1926 which provides an obligation to keep the land fenced off from the adjacent land of the property I am buying (the seller has incorporated this land to increase the size of his garden and not fenced it off, as the conveyance stipulates). The property is on the estate agents website, pictures etc... but doesn't mention about the garden not being part of the property nor is it fenced off.

Provisions also incorporated within the deed with regards to giving up all interest in this land should the local authority require this land for the purposes of making up the intended street which this land was originally to form part of back in the 1920s.

I have been advised by the solictor that it is highly unlikely that there will be any future requirement to give up the land and that I should be looking at indemnity insurance just to protect against the loss of value of this land should this be exercised.

My main issues are that the freehold is not really a freehold and I feel the price of the property i wish to buy has been exaggerated because of the said freehold land. The property sold for 175k 3 years ago and is valued at 250k. 75k profit for the seller who hasnt done any work to the property during the 3 year period.

I dont want to go down the route of trying to fight the council with the unlikely situation if they ever did exercise this clause of using the land.

The indemnity insurance would be to protect against the loss of value of the land. Doesnt mention about the loss of value on the house as the land hasnt been valued.

Finally if I did purchase, I presume I would have to fence off the the freehold land from the property I wish to buy so that I am compliant with the 1926 conveyance. What would be the situation if I didnt do that?. Who would sue me if I didnt do this, the council?

Shall I renegotiate the price of the house or just walk?

Head is saying pull out and find another property. Any thoughts?

Thanks in advance.

AdrianC

Carlsson7 wrote: »

The problem is that within the freehold is a conveyance from 1926 which provides an obligation to keep the land fenced off from the adjacent land of the property I am buying (the seller has incorporated this land to increase the size of his garden and not fenced it off, as the conveyance stipulates). The property is on the estate agents website, pictures etc... but doesn't mention about the garden not being part of the property nor is it fenced off.

Provisions also incorporated within the deed with regards to giving up all interest in this land should the local authority require this land for the purposes of making up the intended street which this land was originally to form part of back in the 1920s.

I have been advised by the solictor that it is highly unlikely that there will be any future requirement to give up the land and that I should be looking at indemnity insurance just to protect against the loss of value of this land should this be exercised.

My main issues are that the freehold is not really a freehold

You're massively over-reacting.

and I feel the price of the property i wish to buy has been exaggerated because of the said freehold land.

OK, so view it as a 900+ year lease instead. What would the value difference be? Nowt...

The property sold for 175k 3 years ago and is valued at 250k. 75k profit for the seller who hasnt done any work to the property during the 3 year period.

Irrelevant.
How does it compare to other properties?

I dont want to go down the route of trying to fight the council with the unlikely situation if they ever did exercise this clause of using the land.

In the massively unlikely event it did ever become an issue, the chances are you'd be looking at a CPO even without that covenant.

Finally if I did purchase, I presume I would have to fence off the the freehold land from the property I wish to buy so that I am compliant with the 1926 conveyance. What would be the situation if I didnt do that?

The beneficiary of the covenant could come along and insist you put a fence up.

Who would sue me if I didnt do this, the council?

The beneficiary of the covenant. Which would most likely be the owner of the house. Oh, wait. That's you.

Carlsson7

Hi Adrian. Appreciate the above comments.

There has only been 1 sale on the road that can be compared to this property and that sold for 165k earlier this year.

I will do some research on CPO and beneficiary covenant, as this is very alien to me.

Thanks again.

davidmcn

An ultra-long lease is, for all practical purposes, worth the same as freehold. The covenants are archaic and you can ignore them. There isn't a problem here.

AdrianC

Carlsson7 wrote: »

There has only been 1 sale on the road that can be compared to this property and that sold for 165k earlier this year.

Look wider than an individual road. Adjust prices up and down for differences in properties.

CPO is compulsory purchase - if a local authority want to do a major infrastructure scheme, they can force you to sell if your land is in the way.

seradane

Could you seek advice as to whether the covenant on the land could be removed?

I know in some cases you can apply to remove/amend covenants on land, but it may be a length/expensive process to do so.

AdrianC

seradane wrote: »

Could you seek advice as to whether the covenant on the land could be removed?

I know in some cases you can apply to remove/amend covenants on land, but it may be a length/expensive process to do so.

I really wouldn't bother. Neither are particularly scary or likely to make the slightest difference in practical reality.

Carlsson7

seradane wrote: »

Could you seek advice as to whether the covenant on the land could be removed?

I know in some cases you can apply to remove/amend covenants on land, but it may be a length/expensive process to do so.

Solicitor is looking at different avenues with regards to this. Thanks

G_M

Carlsson7 wrote: »

Solicitor is looking at different avenues with regards to this. Thanks

As long as your solicitor is not going to add to his fee for this extra work, fine. See what he suggests.


But if he's going to charge you, you are just throwing money away on a non-issue.


BTW, the land IS 'freehold'. Assuming the LR Title describes it as such. Just because there are covenants does not make in not freehold. There are covenants against 1000s of freehold properties across the land.

Chloe_D

Hi I’m looking for a bit of advice. We are first time buyers and looking to relocate as we buy. I’ve told the broker that as soon as we have brought and have the security of keys in hand that I will then put in to transfer with my job. Once we have brought and awaiting transfer I’ve planned to stay in my home town to complete a set of shifts rent free with a family member. I will be travelling 2 hours each set of shifts. So three weeks in four I will travel two hours to my home town and two hours to relocation after my shifts have finished. The fourth week I have rest days. The broker has spoke to lenders and apparently this is a problem and will effect how much lenders will give us. People commute everyday right???? I don’t understand why travelling once a week and staying rent free is a problem???

BoGoF

Start a new thread......and use paragraphs.