Buying a freehold property with leasehold garage. Freeholder of garage changed owner and untracable!

streetlovin

Hi everybody,

I am trying to buy a freehold property that comes with leasehold garage. We got a copy of the leasehold agreement confirming the garage has no payment (peppercorn). We accept that and agreed to proceed.

3 months ago we found out the previous freeholder of the garage sold it to someone else and they are in the process of changing the names on the land registry. The sellers and everyone else who owns the garage on the block weren't made aware of this but neither have they been asked to pay towards the garage insurance, nor for the lease. We have no idea who the new freeholder is and they are unresponsive. My solicitor is insisting that we wait until they get back to us to confirm there is no payment on the leasehold garage before we proceed with completion. However, I am struggling to see why it matters because I am buying the house accepting it would be leasehold. There is no payment on the garage up to this point. Even if they confirmed no payment now, they could change that after I bought it and it doesn't really reduce the risk for me.

I am worried that I would be waiting forever. The new freeholder could become untraceable since they've not responded at all in the past 2 months and it would completely prevent my house purchase from happening. My solicitor doesn't give me a clear explanation as to why it is so important other than simply saying that it is important. 

Has anyone experienced this? Can I override this and proceed to completion or is there too much rish?

It is coming up to 6 months of conveyancing and I am a cash buyer...this one query is delaying everything! 

thank you! 

Slithery

streetlovin said:

We got a copy of the leasehold agreement confirming the garage has no payment (peppercorn).

A peppercorn is a payment. The freeholder is well within their rights to get you to pay them one peppercorn every year.

streetlovin said:

Even if they confirmed no payment now, they could change that after I bought it

No they couldn't. Not without your agreement anyway.

streetlovin said:

Can I override this and proceed to completion or is there too much rish?

As you are a cash buyer then yes, you instruct your solicitor what you want them to do.

streetlovin

Slithery said:

streetlovin said:

We got a copy of the leasehold agreement confirming the garage has no payment (peppercorn).

A peppercorn is a payment. The freeholder is well within their rights to get you to pay them one peppercorn every year.

streetlovin said:

Even if they confirmed no payment now, they could change that after I bought it

No they couldn't. Not without your agreement anyway.

streetlovin said:

Can I override this and proceed to completion or is there too much rish?

As you are a cash buyer then yes, you instruct your solicitor what you want them to do.

Thank you for your answers. Really appreciate it.

Now I am struggling to see why my solicitor is so insistent on getting confirmation from the new freeholder before proceed to completion.

eddddy

streetlovin said:

Now I am struggling to see why my solicitor is so insistent on getting confirmation from the new freeholder before proceed to completion.

Depending on what the lease says, you might be taking on huge liabilities.

As an example, if the lease says the freeholder must maintain the garages, and you must reimburse the freeholder with your share - you might find out that the freeholder has done lots of repairs, and a bill eventually comes to you for £20k.

And/or you get a big bill for the last 6 (or possibly 12) years of insurance.


If that's the kind of thing your solicitor is worried about, you could see if the seller would indemnify you (i.e. the seller agrees to pay any bills that eventually turn up).  But if a bill turns up in a few years time, it might be hard to track down the seller and persuade them to pay.

streetlovin

eddddy said:

streetlovin said:

Now I am struggling to see why my solicitor is so insistent on getting confirmation from the new freeholder before proceed to completion.

Depending on what the lease says, you might be taking on huge liabilities.

As an example, if the lease says the freeholder must maintain the garages, and you must reimburse the freeholder with your share - you might find out that the freeholder has done lots of repairs, and a bill eventually comes to you for £20k.

And/or you get a big bill for the last 6 (or possibly 12) years of insurance.


If that's the kind of thing your solicitor is worried about, you could see if the seller would indemnify you (i.e. the seller agrees to pay any bills that eventually turn up).  But if a bill turns up in a few years time, it might be hard to track down the seller and persuade them to pay.

The lease copy that I have states that I am to contribute on demand 10% of the repair cost set out in the 4th schedule. The  4th schedule states that landlords are responsible for repairing of main load bearing of structure roof and foundation of block to ensure it is in good condition and insurance of fire.

The enquiries my solicitors have raised are;

a. Address for service and fee in respect of notices.

b. Any outstanding payments due in respect of insurance or repairs.  

c. Copy Buildings Insurance for the garage.

d. Confirmation that there has been no breach of the Lease

Sellers said she has never had to pay towards anything or been asked to. and she doesn't know how to answer these questions hence we have been waiting for new freeholder who is no where to be found!

eddddy

streetlovin said:

The lease copy that I have states that I am to contribute on demand 10% of the repair cost set out in the 4th schedule. The  4th schedule states that landlords are responsible for repairing of main load bearing of structure roof and foundation of block to ensure it is in good condition and insurance of fire.

The enquiries my solicitors have raised are;

a. Address for service and fee in respect of notices.

b. Any outstanding payments due in respect of insurance or repairs.  

c. Copy Buildings Insurance for the garage.

d. Confirmation that there has been no breach of the Lease

Sellers said she has never had to pay towards anything or been asked to. and she doesn't know how to answer these questions hence we have been waiting for new freeholder who is no where to be found!

Are you saying that the seller hasn't given any answer at all to the solicitor? If so, that might be the main problem.

She should reply with what she knows, maybe something like:

a) I have never been provided with an address for service or I was provided with this address for service (but I believe there has been a change of freeholder since).

b) I have never received a demand for a payment in respect of insurance or repairs, therefore no payments are outstanding

c) I have requested a copy of the buildings insurance from the freeholder, but I have not yet received it

d) To the best of my knowledge, I have not breached the lease and there are no ongoing breaches


But whatever she says must be true (so she shouldn't say any of the above, if they're not true).


As far as the solicitor is concerned, the seller might be failing to reply because she's trying to hide the fact that there are huge outstanding payments, and that she has breached the lease, etc.

streetlovin

eddddy said:

streetlovin said:

The lease copy that I have states that I am to contribute on demand 10% of the repair cost set out in the 4th schedule. The  4th schedule states that landlords are responsible for repairing of main load bearing of structure roof and foundation of block to ensure it is in good condition and insurance of fire.

The enquiries my solicitors have raised are;

a. Address for service and fee in respect of notices.

b. Any outstanding payments due in respect of insurance or repairs.  

c. Copy Buildings Insurance for the garage.

d. Confirmation that there has been no breach of the Lease

Sellers said she has never had to pay towards anything or been asked to. and she doesn't know how to answer these questions hence we have been waiting for new freeholder who is no where to be found!

Are you saying that the seller hasn't given any answer at all to the solicitor? If so, that might be the main problem.

She should reply with what she knows, maybe something like:

a) I have never been provided with an address for service or I was provided with this address for service (but I believe there has been a change of freeholder since).

b) I have never received a demand for a payment in respect of insurance or repairs, therefore no payments are outstanding

c) I have requested a copy of the buildings insurance from the freeholder, but I have not yet received it

d) To the best of my knowledge, I have not breached the lease and there are no ongoing breaches


But whatever she says must be true (so she shouldn't say any of the above, if they're not true).


As far as the solicitor is concerned, the seller might be failing to reply because she's trying to hide the fact that there are huge outstanding payments, and that she has breached the lease, etc.

The sellers actually provided answers exactly as you said. So my solicitors try to get hold of the freeholder of the garage so they can answer these questions. The freeholder of the garage is the one not answering these questions. Sellers already shared everything they knew. They werent even made aware that the previus freeholder of the garage sold it to someone else! All a bit weird.

Thankyou so much i am understanding my solicitors concerns a bit more now.