First time buyer , Unregistered/absent freeholder with registered good leashold title

mailjason07

Can some one advice me on this , I am a first time buyer and the proeperty that we where looking to buy was a leasehold property which had more than 800 years left in the lease. My solicitors say that it is a risk to buy this property due to the unregistered element on the property. They are ready to provide indemnity insurance. I wanted to know what are the risk involved and can I even register this property in the near future. 

mailjason07

Offered a market value for the property and after finding out this issue am I in a position to negotiate with the seller ?? If am ready to take the risk?? Or is it worth taking the risk at all ? 

AdrianC

When you say your solicitors are "ready to provide" indemnity, I presume there is an expectation that you will pay the premium for the policy...?

Yes, the leasehold will be registered in your name - no issue there.
The potential issue is that the freeholder is no longer extant. I presume this was a 999 year lease when new, so it's nearly 200 years since it was issued. The freeholder has probably died, as have several generations of beneficiaries... I would lay odds on the current freeholder not actually knowing they are the freeholder, assuming it isn't the Crown's Bona Vacantia division.
https://www.gov.uk/government/organisations/bona-vacantia

Either way, the risk of any problems arising from the absent freeholder are minimal. Your maximum exposure is six years owed ground rent (six peppercorns...?). In two years, you can start the process to statutorily purchase the freehold.
https://www.lease-advice.org/faq/i-own-a-leasehold-house-how-do-i-buy-the-freehold/

mailjason07

can i negotiate on the price of the property 

davidmcn

Why isn't your solicitor giving you advice? This is what you're paying them for. 

mailjason07

Hello david , I made a mistake at choosing the solicitor's , I am tired asking them , finally they said i can negotiate but how much . what reasons should I mention . at least I have to mention to the seller due to so an so reason I have will be lowering this much . 

mailjason07

My solicitors said there is risk, but in the above comment in which Adrian mentioned i can go for a statutorily purchase. Is it possible if there is no information of the freeholder. Because my solicitor mentioned that I cant register this property.  

AdrianC

mailjason07 said:

My solicitors said there is risk, but in the above comment in which Adrian mentioned i can go for a statutorily purchase. Is it possible if there is no information of the freeholder. Because my solicitor mentioned that I cant register this property.  

Of course you can register the lease. The lease is already registered, you told us that in the thread title.

You can't register the freehold - because you aren't buying that.

eddddy

mailjason07 said:

My solicitors said there is risk, but in the above comment in which Adrian mentioned i can go for a statutorily purchase. Is it possible if there is no information of the freeholder. Because my solicitor mentioned that I cant register this property.  

The law is intended to allow you to compulsorily buy your freehold - even if the freeholder (landlord) is untraceable. It's called 'statutory enfranchisement'.

However, the Law Commission Consultation paper on Leasehold property says:

3.26 We identify a number of problems with the existing procedures. For example: 
...
(3) The procedure for dealing with “missing landlords” is complex and almost impossible for leaseholders to follow. In some cases, the cost of trying to locate a landlord, and applying to the county court for a vesting order107 if he or she cannot be found, can exceed the price to be paid for the interest claimed. 

Link: https://s3-eu-west-2.amazonaws.com/lawcom-prod-storage-11jsxou24uy7q/uploads/2018/07/Leasehold-home-ownershi-buying-your-freehold-or-extending-your-lease.pdf

But the Law Commission are recommending that the process be made simpler and cheaper. So things might change in a year or two.

mailjason07

@AdrianC and @eddddy  Thank you both , for the efforts. One last question 
I have put an offer 144,000 GBP  for 3bed semi detached house in Manchester after doing the survey and valuation. The survey and valuation does not looks at the legal side. 
If any of you had to buy this house knowing about this issue of unregistered freehold, How much more would you have negotiated on the price ?? Just a rough Estimate in percentage / would you negotiate at all ?

greatcrested

I seriously doubt the seller will entertain a reduced offer basedon this.

Of course, if he is desperate to sell, and believes you will refuse to buy unless the price is reduced, he may agree. Who knows?

I wouldn't.

He is selling the lease, which is registered. You agreed a price for the lease, which will be registered in your name.

As this is a house, not a flat, an absent freeholder does not really even affect things like insurance or maintenance which will be your responsibility either way.