Seller refusing to sign LPE1 form

london21

If seller is not cooperating, find another property.

rexmedorum

Were you given any reason as to why the won't sign?

Brie

When we were selling MiL's flat the freeholder wouldn't sign as they didn't know anything about the property.  I think when they had purchased their flat and the freehold a few months earlier they didn't get a LPE1.  If they had they would have known all the answers.  As it was we ended up filling it out as MiL had lived there for 30+ years.  But we couldn't sign it of course and the freeholders refused but their solicitor was fine signing on their behalf (for a few) taking what we had filled in as correct.  

Potentially your freeholder also purchased recently and without an LPE1 and that's why they can't in good faith complete it.  Can the person with the leasehold who presumably has been there a while assist in any way??  

suoneena

rexmedorum said:

Were you given any reason as to why the won't sign?

The seller says they have insufficient knowledge of the property (they are a resale company who bought the flat 6 months ago and never lived there - although they did complete the form). And the co-freeholders said they believe the form should only be signed by the seller (I don't think that's right?)

suoneena

Titus_Wadd said:

Your solicitor might be able to hold back the amount of unpaid ground rent for the time between the last collection and the completion date to cover a bill that might be presented to you as the new owner. 

Thank you - I won't have to pay the ground rent as I'd be the co-freeholder after purchase. Only the leaseholder needs to pay ground rent (they're the third flat, w/o a share in the freehold). The ground rent would be paid to me and the other co-freeholders who are currently trying to collect it but not hearing back from the leaseholder, which makes me wonder about how cooperative the leaseholder is.

Slithery

suoneena said:

Titus_Wadd said:

Your solicitor might be able to hold back the amount of unpaid ground rent for the time between the last collection and the completion date to cover a bill that might be presented to you as the new owner. 

Thank you - I won't have to pay the ground rent as I'd be the co-freeholder after purchase.

You still have to pay the ground rent...

eddddy

suoneena said:

rexmedorum said:

Were you given any reason as to why the won't sign?

The seller says they have insufficient knowledge of the property (they are a resale company who bought the flat 6 months ago and never lived there - although they did complete the form). And the co-freeholders said they believe the form should only be signed by the seller (I don't think that's right?)

Unfortunately, this is one of the risks of an informal "shared freehold".

If it was a 3rd party freeholder, employing a professional managing agent - they'd almost certainly fill-in and sign the LPE1 - but the seller would have to pay them a fee for doing it.


This situation suggests that the other joint freeholder "doesn't understand the role of a freeholder" or is being difficult or is scared of signing official forms etc.

Maybe you should consider whether it's sensible to go ahead and jointly own a freehold building with somebody like that.

hazyjo

Just to let you know, you will also still be a leaseholder. All 3 flat owners are leaseholders, not just the one who doesn't have a share in the freehold.

HopeAndDriftWood

We've had fun with our LPE1... Our freeholder will fill it in and sign it for a fee, but they'll only fill in the questions relating to ground rent, nothing else.

Our service charge goes to a Committee that everyone is a member of... we can fill in all the details and provide all the evidence for the rest of it, but there's nobody on the Committee to sign it, everyone has an equal position. Typically we'd have general meetings and the treasurer/admin/someone else would sign there if we asked, I think, but everyone is pretty widespread because of Covid at the moment... 

We've provided all the information separately to the form and that seems to have gone okay so far, but it does seem to be an awkward process. There's nothing to hide in our accounts, everything is audited and well documented, all checks and things are done, no issues with Section 20s/collecting ground rent/nobody in arrears... it's a clear form, there's just not really anyone in our current set-up to sign to that effect, with the way things are currently set up. 

eddddy

HopeAndDriftWood said:

We've had fun with our LPE1... Our freeholder will fill it in and sign it for a fee, but they'll only fill in the questions relating to ground rent, nothing else.

Our service charge goes to a Committee that everyone is a member of... we can fill in all the details and provide all the evidence for the rest of it, but there's nobody on the Committee to sign it, everyone has an equal position. Typically we'd have general meetings and the treasurer/admin/someone else would sign there if we asked, I think, but everyone is pretty widespread because of Covid at the moment... 

We've provided all the information separately to the form and that seems to have gone okay so far, but it does seem to be an awkward process. There's nothing to hide in our accounts, everything is audited and well documented, all checks and things are done, no issues with Section 20s/collecting ground rent/nobody in arrears... it's a clear form, there's just not really anyone in our current set-up to sign to that effect, with the way things are currently set up. 

So as a committee, why haven't you decided a process for how a document like that gets signed?

My viewpoint would be... if you want to set up a Committee that deals with the service charge, the Committee should do the whole job (including signing documents), not just part of it.


I find it a little bit scary that groups of leaseholders are buying freeholds, forming RTM companies, forming committees, etc without understanding the scope of the responsibilities they're taking on.

And it turns into a nightmare for individual leaseholders - for example, when their flat becomes virtually unsaleable because nobody will sign an LPE1 form, nobody will answer pre-contract enquiries, etc.