LIVE: Buying a house - Converting a leasehold to a freehold before exchange - land registry delay

jannatiex4

Hi everyone, 
I'm so close to exchanging, it could potentially be on the 11th Dec, however, I have just found out some damaging news today that could delay the exchange by 10 months.
As part of the deal, the seller agreed to change the house from leasehold to freehold at their own cost, meaning I effectively buy a freehold house.
Between the management company and the seller's solicitor, the wrong name was put on the TP1 document, and I have been told that it will be resubmitted to my solicitor in the next couple of days. 

The seller's solicitor has recommended that they can handover proof that they have purchased the freehold from the management company and that they will supply all email threads and correspondence, and we go ahead will the exchange on the 11th. After completion, my solicitor will register it with the Land Registry. If we wait for the Land Registry to be completed it could take up 10 more months to complete this process, when I am expecting to complete in 4 days.

My solicitor is saying my bank which I am getting my mortgage from will not activate the mortgage, and I'm not sure if this is true. 
My estate agent is saying they have done this before and the banks will accept this.
I have reached out to my mortgage broker today, but currently waiting for a reply.

Do I just buy it as a leasehold, knowing the freehold has been purchased from the management company and just get it registered after I buy the property with the Land Registry? This is my initial thought!

Please help and advise as I'm sure there is a simple solution to this! 

Many thanks in advanced,
Nabil

Slithery

It will only take 10 months if the vendors solicitor doesn't apply to LR to get the application expidited. Post on the Land Registry questions thread with the title number and they should be able to advise you of the correct timescale.

jannatiex4

Slithery said:

It will only take 10 months if the vendors solicitor doesn't apply to LR to get the application expidited. Post on the Land Registry questions thread with the title number and they should be able to advise you of the correct timescale.

Thanks @Slithery, im only 4 days away from the target completion date, I don't think LR will complete within this time, I wonder if I can complete with a unregistered freehold, and let my solicitor register it with LR after completion? 🤔

davidmcn

jannatiex4 said:

Slithery said:

It will only take 10 months if the vendors solicitor doesn't apply to LR to get the application expidited. Post on the Land Registry questions thread with the title number and they should be able to advise you of the correct timescale.

Thanks @Slithery, im only 4 days away from the target completion date, I don't think LR will complete within this time, I wonder if I can complete with a unregistered freehold, and let my solicitor register it with LR after completion? 🤔

I don't see why not, though some solicitors seem to be paranoid about proceeding without another solicitor's application having first completed registration. But really they ought to be able to figure out for themselves whether the deeds are competent.

greatcrested

jannatiex4 said:

My solicitor is saying my bank which I am getting my mortgage from will not activate the mortgage, and I'm not sure if this is true. 
My estate agent is saying they have done this before and the banks will accept this.

Your solicitor will be acting for the bank and advising them on legal matters connected to the loan, and the security of the loan (ie the property).

If he advises them that the seller's suggestion is not sufficiently safe, they will not lend the money unless the freehold is what is being sold.

There is no way this can be done in 4 days, though 'expiditing' the transfer will cut down the timescale.

Your options are therefore

* withdraw and find a different freehold property

* delay Exchange into the New Year

* pursuade the bank's solicitor (who happens also to be your solicitor) to advise the bank (his other client) that Exchange in 4 days poses no risk to them.

Land_Registry

Greatcrested has covered it as any No to preceding will invariably be down to your lender and the mortgage deal involved. 

The EA will undoubtedly have experience of clients who have achieved such things but doubtless with a different lender and/or mortgage product. The lending market is not a one-size fits all in my experience. 

We do have lengthy delays on some types of application but as Slithery posted we have an expedite process which can reduce the wait to a couple of weeks. Everything then hinges on it then all being in order. But as you appreciate irrelevant now as you’ve got just 4 days to sort so I hope you find a positive solution and are able to wrap things up 8n a way that works for your lender, solicitor and you 

jannatiex4

Thankyou @Land_Registry & @greatcrested, so if the mortgage offer has the property listed as Leasehold and vendor purchases the freehold and hands it over to me before completion, is it possible to register the freehold after completion with land registry?
If possible, will this only be possible based on my Conveyancer persuading the bank that it poses no risk?

anselld

jannatiex4 said:

Thankyou @Land_Registry & @greatcrested, so if the mortgage offer has the property listed as Leasehold and vendor purchases the freehold and hands it over to me before completion, is it possible to register the freehold after completion with land registry?
If possible, will this only be possible based on my Conveyancer persuading the bank that it poses no risk?

That is correct, but to be clear it is your Solicitor making the decision.  

The bank have little or no legal expertise so they ask your solicitor (who also acts for them) what they should do.  If the Solicitor says it is ok then they will proceed. 

So when the Solictions says the bank will not proceed it is because they themselves have advised them not to.  There is no "persuasion" involved.

Land_Registry

Legal ownership has to be transferred so a ‘mention’ and ‘handed over’ are insufficient and not definitive enough. 

The key for the lender is that the value of the secured tenure is not impacted upon. But as posted it’s your conveyancer you need to rely on here as to what’s possible, what the risks are and what has to happen before you can buy

jannatiex4

I really appreciate the guidance from @Land_Registry, @anselld & @greatcrested, the activation happened from you guys and now both solicitors are taking this route sooner rather than later.

The seller's solicitor said:
If we have to wait for the registration of the freehold we believe the chain will be in jeopardy.

My solicitor's reply is:

If our client is agreeable for the TP1 being registered by ourselves post-completion we shall require a certified copy of the Power of Attorney under which the TP1 is being executed by the registered proprietor of the freehold.

What are these extra certification my solicitor is requesting? What does it mean in plain English? and how much time is involved in this roughly?

You're probably thinking why don't I speak to my solicitor, in fact, i would like to understand fully before I talk to my solicitor, thanks. 

Land_Registry

The seller is acting by way of an attorney so the solicitor is asking for a certified copy of the power of attorney that appoints him/her as attorney. Routine request