Who owns the garden in this complex scenario?

sand_hun

Picture a large Victorian home split into two leasehold flats (upper flat and lower flat). Towards the rear of the property is the 'main garden' as well a summer house.

Please note, the upper flat is the larger and costlier of the two. It's a duplex.

I moved into the upper flat several years ago. The previous occupier maintained the garden and summer house while the occupant of the lower flat maintained a much smaller, segregated courtyard garden. 

Now we're in the process of re-mortgaging, the conveyancing team has claimed that we do not own the garden nor the summer house. Based on the Land Registry title plan (for the lease), this does seem to be the case - the red outline on the diagram does not cover the section which includes the garden/summer house. Therefore we can assume the garden officially belongs to the lady who owns the freehold.

However, my lease states that I have "the right to use the garden and the garden room edged yellow on plan number 2".

While I do not have the lease for the lower flat I do not believe theirs mentions that they have a right to use the garden and summer house. 

Here's where things get even more complicated. We're currently buying the freehold - jointly between the upper and lower flat. Since our flat is bigger and we have been using the main garden/summer house, we have agreed to pay 70% of the cost.

So, when the freehold is bought, does that mean the upper flat owns the garden? Or do the land registry titles remain as they are?

user1977

Joint ownership of the freehold makes no difference to your respective rights under the leases. Though it will make it easier to change those (assuming you both agree!).

nicmyles

So, I *think* you would in effect jointly "own" the garden as you would be joint freeholders.

But in terms of who can *use* it, I *think* this would still be guided by the existing leases, i.e. upper flat, not lower. But of course when you jointly own the freehold, you could between you opt to alter the lease or indeed ignore its provisions.

It does sound like since you have had the financial discussion, the lower flat acknowledges buying the freehold will not allow them to start using the main garden, but you may be wise to make explicit what their understanding is and that it is the same as yours. 

I have to say, I'm not very clear what your remedy would be if they or a future owner ignored the lease and started using the main garden. I'm not entirely sure you would have one.

sand_hun

I see. The owner of the lower flat is looking to sell and move out within a matter of months. We had hoped to complete the joint freehold purchase beforehand.

Would it change anything if I were to purchase the freehold entirely on my own? Or maybe, since it's emerged that I no longer own the garden/summer house I'm debating whether it's worth purchasing the freehold at all!

Alter_ego

As a leaseholder you own nothing. The freeholder owns property in U.K

A lease is only a long term rental agreement

user1977

Alter_ego said:

As a leaseholder you own nothing. The freeholder owns property in U.K

They own the leasehold interest in the property.

Alter_ego

user1977 said:

Alter_ego said:

As a leaseholder you own nothing. The freeholder owns property in U.K

They own the leasehold interest in the property.

OK, they have an "Interest"  They own nothing tangible, which is my point.

bouicca21

Why not get a copy of the lower flat’s lease to find out what rights they have?

nicmyles

sand_hun said:

I see. The owner of the lower flat is looking to sell and move out within a matter of months. We had hoped to complete the joint freehold purchase beforehand.

Would it change anything if I were to purchase the freehold entirely on my own? Or maybe, since it's emerged that I no longer own the garden/summer house I'm debating whether it's worth purchasing the freehold at all!

Well, if I've understood you correctly, it's not that you "no longer" own them, it's that you never did, you just had permission to use them as a term of your lease.

And again if I've understood you correctly, you *would* own the garden/summer house, along with your neighbour, once you purchase the freehold. So if ownership of them is important to you, you should buy the freehold.

Buying it alone would make a considerable difference, it would put you in total control of what happens with the property (subject to terms of leases), whereas if you buy jointly, this responsibility is shared with the other flat.

You would have more ability to enforce the usage of the garden that you prefer, if you were the sole freeholder and the other flat just had a lease. You would also set service charges, collect and benefit from any ground rent specified in the leases, etc.

However, you would also take on various responsibilities solely (e.g. buildings insurance), and you should do your research to be sure you understand these before making a decision.

However, it may be that you would prefer not to have a freeholder/leaseholder relationship with your neighbour, which I suppose could be complex.

EDITED TO ADD: Whether you buy the freehold with your neighbour or alone, I would strongly recommend buying it, for the simple reason that then many issues to do with your property sit within your control (or at worst yours and your neighbour's) and not someone else's.

AdrianC

sand_hun said:

Now we're in the process of re-mortgaging, the conveyancing team has claimed that we do not own the garden nor the summer house. Based on the Land Registry title plan (for the lease), this does seem to be the case - the red outline on the diagram does not cover the section which includes the garden/summer house. Therefore we can assume the garden officially belongs to the lady who owns the freehold.

However, my lease states that I have "the right to use the garden and the garden room edged yellow on plan number 2".

While I do not have the lease for the lower flat I do not believe theirs mentions that they have a right to use the garden and summer house. 

Here's where things get even more complicated. We're currently buying the freehold - jointly between the upper and lower flat. Since our flat is bigger and we have been using the main garden/summer house, we have agreed to pay 70% of the cost.

So, when the freehold is bought, does that mean the upper flat owns the garden? Or do the land registry titles remain as they are?

There are three property titles.

1. Freehold of the entire house and entire grounds.
2. Lease of the upper flat and portion of grounds.
3. Lease of the lower flat and portion of grounds.

There may well be land in the freehold that isn't in either lease. But you can obtain the lower flat's lease for a couple of quid from the land registry website.

Remember that after you and your neighbour buy the freehold, that doesn't change the leases or which bits of land they include in any way. You will simply own two completely different things...

You currently own 100% of 2. You will own 70% of 1 plus 100% of 2.

Your neighbour currently owns 100% of 3. They will own 30% of 1 plus 100% of 3.

TBagpuss

If you buy the whole of the freehold then you will own the garden . It will still be subject to any rights the other leaseholder has under their lease 

If you and the other leaseholder buy the freehold jointly then you will jointly own the garden, subject to any prior rights under the leases. You could probably have a formal declaration of trust drawn up explicitly identifying who had rights to occupy / access the garden. 

If you can afford it, you buying the freehold might be best , but you fellow leaseholder may be less willing to do this is it is likely to make their flat less valuable / attractive to a buyer.