Share-of-freehold lease extension before completion and additional clauses added by co-freeholder

jdow88

I'm in the process of purchasing a share-of-freehold property with an 89 year lease. The building is split into two flats.

The vendors solicitor is representing both the seller and the co-freeholder and I have some concerns over the proposed lease extension process (up to 999 years) and additional clauses being added to the lease I am purchasing by the co-freeholder.

1) The vendors solicitor will be managing the lease extensions for both leases at the same time which will be granted in the names of the current freeholders/tenants. They will also be dealing with the registration of the transfer of the share of freehold title to me. As such they will require my original signed freehold transfer prior to completion to avoid a delay in the registration but are unwilling to provide my solicitor a 'best endeavours' assurance to deal with any requisitions raised by the land registry in respect of the transfers.

2) A new clause has been inserted by the co-freeholder which states:

Not to assign transfer or part with possession of (except by way of underlease) the Property unless contemporaneously with such assignment transfer or parting with possession to transfer all their legal and beneficial ownership of the freehold of the Building to the same person that they have assigned transferred or parted with possession of the Property to.”

My understanding is that this is to prevent the lease being separated from the freehold. My solicitor says this should be taken out and the deed of variation amended to show that a certificate from a conveyancer will be acceptable for any future sale if the co-freeholder is absent or obstructive for whatever reasons. There is no managing company in this situation and the co-freeholder says this is not an option for them. My solicitor proposed the following wording:

Not to assign transfer or part with possession of (except by way of underlease) the Property unless contemporaneously with such assignment transfer or parting with possession to transfer all their legal and beneficial ownership of the freehold of the Building to the same person that they have assigned transferred or parted with possession of the Property to

PROVIDED THAT the freeholder or freeholders who are required to execute any such transfer shall do so without unreasonable delay and if they fail to do so(a certificate by a conveyancer being conclusive evidence of such facts) the Property may be transferred by the Tenant without transferring all their legal and beneficial ownership of the freehold of the Building”

The above amendment has been rejected by the co-freeholder and sellers' solicitor and my solicitor is now refusing to apply for mortgage funds as under the co-freeholders terms he says no lender would be able to repossess should that happen and he has a duty to protect lenders.

As it stands neither side is backing down and I am being prevented from purchasing the proporty by my own solictor regardless of whether I accept the terms as they are. It looks like the purchase is about to fall through so i wanted to ask if any of this is normal and if anyone had any experience or tips on how to overcome this situation?

eddddy

Is all the communication going via solicitors at the moment?


This is a case where a skilled, knowledgeable EA might be able to get involved to unblock the stalemate.


For example, the EA can ask the co-freeholder(s) if they are refusing the extra clause in the lease based on legal advice from their solicitor - or if it is for a misguided 'amateur' reason.


(An example of a misguided amateur reason might be that the co-freeholder wants to be able to veto a sale of the other flat, if they don't like the the look of the purchaser.)


And the EA can go on to explain to the co-freeholders that neither of them would be able to sell their flats to somebody needing a mortgage, without that clause.


And for that matter, have both the co-freeholders checked with their own mortgage lenders that they are happy with the lease variation without that clause?