Intermediate Leasehold question

Lizzog

We have lived in our terraced property since 1998, and since this date have been paying ground rent to a rent collection agency.  Our neighbour recently died, and her son informed us that their parents had bought the freehold jointly in 1973 with the previous occupants of our house.  We queried this with the rent collection agency, who advised us that the Freehold was purchased, but they didn't buy the intermediate leasehold interest of  the property.  They have sent us a an official copy of the Register of Title showing this.  
Could someone explain this to me in plain English as I don't understand what the intermediate leasehold interest is, why the previous occupants didn't buy it (and what the benefit of buying the freehold was if they are still paying ground rent), and would it be beneficial for us to buy this?  The Lease is dated 30th December 1903 for 800 years from 25th March 1903. 
Advice greatly appreciated!

greatcrested

There is a freehold, owned jointly by the neighbours' parents (or their succesors) and the previous owner of your house (unless you bought it as well as the sub-lease below?)

There is a lease owned by (presumably) the 'rent collection agency'.

There is a sub -lease owned by you.

If you buy all three titles (£3 each) from the land registry you can confim who owns what.

eddddy

Lizzog said:

Could someone explain this to me in plain English as I don't understand what the intermediate leasehold interest is, why the previous occupants didn't buy it (and what the benefit of buying the freehold was if they are still paying ground rent), and would it be beneficial for us to buy this?  The Lease is dated 30th December 1903 for 800 years from 25th March 1903. 

So the ownership structure would be:

1. Freehold
2. Intermediate Lease (sometimes called Head lease)
3. Lease (sometimes called Sub Lease)

I guess the reason for the leaseholder buying the freehold might be as follows (using an example of a short 50 year lease and 50 year Intermediate lease) :

• If the Lease and Intermediate Lease both had 50 years left, the leaseholder would lose the property after 50 years.

• But if the leaseholder buys the freehold, they continue to pay the Intermediate Leaseholder ground rent for the next 50 years, and abide by the terms of the lease for the next 50 years. But then the Intermediate Lease expires, and the leaseholder then owns a freehold house.

But in your case, if the Intermediate Lease runs until 2703, you'd have to wait until then before you own the freehold house. So the benefit seems to be very limited. You will have to pay ground rent and abide by the terms of the lease until then.

(But I'm no expert on this - there may be other benefits to owning the freehold.)

Lizzog

Thanks both - this is what I am struggling to understand, although I think there were a lot of people being persuaded to buy their freeholds in the 1970's ?? - what benefit was there to them owning it in this case?  

eddddy

Lizzog said:

Thanks both - this is what I am struggling to understand, although I think there were a lot of people being persuaded to buy their freeholds in the 1970's ?? - what benefit was there to them owning it in this case?  

I guess it might have just been 'inertia buying'.  Maybe everyone was saying that buying your freehold is a good thing - which it might have been in many circumstances.

The freeholds would have been pretty-much valueless, so they might have been offered very cheaply. So people might just have gone ahead and bought them, without taking advice, and without realising that it's fairly pointless if you have a long lease and there's an intermediate lease.

Lizzog

Yes that's what I wondered