Airspace lease

dulededulede

Hi

My mother had a stroke in 2014 which left her with dementia and us not able to get power of attorney due to her loss of capacity. But there was never anything to say she had no capacity at certain times and for certain decisions. 

A company offered my mother solar panels which were fitted. My mother passed away in August 2022 - three months ago. Now I have had probate back and need to consider selling the house for the benefit of her grandchildren who are now going to be part owners. The main title deeds are freehold and fine but I have now noticed and bought title deeds to what is classed as a lease for 20.5 years on the front south facing half of her pitched roof. Now, I am fine providing the house can be sold on to another person. It is a terraced house just as in any UK city and there is no value to any owner of that part of the house which is just sky. 

But the exact wording is:

The Leasehold land demised by the lease referred 1 2015-12-09 to below which lies within the area shown edged with red on the plan of the above Title filed at the Registry and being airspace above the south-facing side of the roof of ##### (address)

3    2015-12-09    The Lease prohibits or restricts alienation.
4    2015-12-09    The land has the benefit of any legal easements granted by clause LR11.1 of the registered lease dated 30 October 2015 referred to above.
5    2016-10-18    The landlord's title is registered.

B: Proprietorship Register
This register specifies the class of title and identifies the owner. It contains any entries that affect the right of disposal.

Class of Title: Title good 

Does this prevent sale. The house is meant to be passed to four grandchildren. The hope is obviously that the house will be sold so they can each have the realised benefits of the house value. I am not concerned with doing anything above the roof but have this company locked my mother who was 71 at the time into a twenty year lease leaving her if she had survived that long unable to sell any part of her house. I effectively need to sell the whole house and don't know what this does. The company should have sought some form of advice from us surely if the person has significantly different mental capacity as my mother did as she had immediate dementia brought on my a stroke in 2014. 

Pretty worried about this as my mother had no intention on leaving an unsaleable house. Am I worrying for nothing? Thank you all for any advice.

user1977

No, it doesn't prevent the landlord's interest in the house being sold, but it means any buyer will still have the tenant on the roof. How much that might put off buyers (in particular, whether it's likely to be acceptable to mortgage lenders) depends on the terms of the lease.

Jonboy_1984

To be sellable the air-space lease needs to in accordance with the council of mortgage lenders (CML) guidance or a deed of variation agreed with either supplier or their replacement** to do so.

The house we were looking at buying didn’t happen so didn’t go through the process myself.I did find some information by googling the name of the original installer at the time.

**many of the original provides have gone bust and subsequently asset stripped so new beneficiaries of the feed in tariffs are in place.

dulededulede

Still a bit confused but it appears by what has been said that it doesn't prevent the benefiiciarie in her will from receiving and then selling on the house - as a house. The solar panels on the roof only present an issue as far as a sale is concerned for one of two reasons:

If the panels begin to fall apart or similar and start to cause trouble to the roof itself which I would presume is unlikely
If the house roof itself fails and needs replacing

My son as the largest single beneficiary is considering buying his cousins out and living there. He considers the solar panels a benefit and not a hindrance. If I am right based on what you have replied there is no danger in selling the whole house minus the airspace lease to anyone else later on. The only problems other than mentioned above being if an individual 'buyer' has their own reasons not to buy a house with solar panels on roof. It wouldn't put me off as the neighbourhood is not one bought and sold for the asthetics but just for decent solid housing built originally as slum housing for workforces in the 1880s. It is not a heritage site type of environment. 

If right then there will be nothing to prevent me registering the beneficiaries with the land registry as new owners. My mother had absolute title of the main house and it is freehold. It is only a case of waiting another 13 years before we could ask the lease owner of the airspace to remove their panels. Until then they just don't want anything else blocking the sun. Does this sound about right. I also presume that if they sold the airspace to a third party the new third party would still have to seek permission to do anything on the roof as the lease is for airspace and not the roof at all. That remains ours. The airspace is theirs for now. 

Thank  you for your advice. I was worried sick when I found this just now and thought....What? But it is the abilty to sell the main house that matters and that seems fine. Thank you for any clarity you may be able to add.  

eddddy

What you've posted doesn't suggest that the property is unsaleable.

The roof / airspace lease will continue after the sale, so you'll need to find a buyer who's happy to carry on with the lease.

Perhaps more importantly, if somebody wants to buy with a mortgage, their mortgage lender will need to be happy with the lease.


Some mortgage lenders don't lend at all on houses with roof / airspace leases. Those that do lend need the lease to meet some minimum requirements - and they will want a "break clause" in the lease that ends the lease if the property is repossessed.

If the lease doesn't currently have a "break clause", you'll have to ask the tenant (i.e. the solar panel company) if they'll agree to a lease variation to add a "break clause".

Here's what various mortgage lenders say about solar panels: See: https://lendershandbook.ukfinance.org.uk/lenders-handbook/englandandwales/question-list/2114/

eddddy

.... or if all else fails, you can ask the tenant (i.e. the solar panel company) if you can "buy out" the lease.

In simple terms, you would pay the solar panel company a chunk of money, and they will agree to end the lease - so you get the rights to your roof / airspace back.

dulededulede

The next buyer will hopefully be my son as we want to keep the house in the family. Houses in the area are at most £160,000 and my son has half that as beneficiary. He needs just to achieve a mortgage of around £60,000 as he has a substantial deposit of £20 to £30,000 but would hope to have £10,000 left to do some tune ups in the house. 

The Atom document is a pretty sour point on things. Worst case scenario is that the house loses some value and a sale goes to a builder or someone in auction. But there must be ways around this as the house is currently held only by family. The affordability of my son should be pretty good. I don't know what the situation would be if we gave half or our house to our son to allow him to mortgage against that just to buy his cousins out. 

But with the government causing such a fuss for feed in tariffs and other reasons to do with being green. I am surprised mortgage lenders consider the issue of panels so harshly. That said the average mortgage company is just greed given a name. 

Even though houses are limited price wise around here the rental income is around £1100 currently so he could rent the house out in future if buyers have trouble getting mortgages while airspace lease in place. I would assume my son would live there for 5 or more years initially though. Still it is a matter I hadn't considered and only because I wanted to double check my mother's house was freehold did I decide to check. I first thought someone had done identity theft and it was a form of Airbnb....airspace. Will work things out one way or another. It may have to come down to cousins making agreements with each other though if no mortgage available. We had no idea until the panels were in as we were away at the time. Thank you all.  

dulededulede

'Lenders want to be sure that if you default on your mortgage that they’re not left with a property that’s worth less than the original loan.'

Just seen this and if this is the main reason, that if a repossession occurs the entire house could realise the outstanding mortgage, which at say £60,000. Houses needing gutting are going for £100k plus so there shouldn't be any major issues on that score. I hope. Thank you all. 

eddddy

dulededulede said:

The next buyer will hopefully be my son as we want to keep the house in the family. Houses in the area are at most £160,000 and my son has half that as beneficiary. He needs just to achieve a mortgage of around £60,000 as he has a substantial deposit of £20 to £30,000 but would hope to have £10,000 left to do some tune ups in the house. 

If the lease doesn't have the required break-clause and/or meet the UKF minimum requirements, I doubt any lender will give your son a mortgage - not even a small mortgage.

dulededulede said:

I don't know what the situation would be if we gave half or our house to our son to allow him to mortgage against that just to buy his cousins out. 

Nobody can take out a mortgage on half a house. (How would the mortgage lender repossess and sell half the house?)

• But you could mortgage your house and give your son the money you raise.

• Or you could make your son a joint owner of your house, and all of you could take out a joint mortgage on the whole house. (But be aware of Capital Gains Tax etc for your son.)

dulededulede said:

Worst case scenario is that the house loses some value and a sale goes to a builder or someone in auction. 

I'm not sure why a builder would want a house with solar panels on the roof.  More likely, it would sell to a cash buyer, either for owner/occupation or as an investment to be rented out.

But you should at least try for a lease variation - and if that fails, ask about buying out the lease.

user1977

dulededulede said:

'Lenders want to be sure that if you default on your mortgage that they’re not left with a property that’s worth less than the original loan.'

Just seen this and if this is the main reason, that if a repossession occurs the entire house could realise the outstanding mortgage, which at say £60,000. Houses needing gutting are going for £100k plus so there shouldn't be any major issues on that score. I hope. Thank you all. 

Lenders like to keep things simple and will have certain criteria they expect every property to comply with, rather than have to figure out to what extent a particular complication will affect the value or deter people from buying altogether.

dulededulede

So it would appear that I will just have to find out what can be done and go with that. But if this is correct and i have no doubt in believing it is. Every single person with any standard lease based on solar panels is going to be facing severe restrictions in mortgage company, I'm assuming my mother's is a standard lease. There are nearly a million homes potentially in this sort of situation. Knock that back by 25 percent for self installs and you still have 750,000 problem mortgages. 

My own house is a property with an outbuilding taking up at least half the garden space. Imagine a long terraced plot and a third of that taken up by a 2up 2down and that is my house. Great if I own the outbuilding but an owner many years ago sold it on. This being a major impediment compared to surrounding homes that retain the outbuildings still allowed for us to get mortgages. That said the purchase was in 1991 and we last remortgaged in 2004. But complete loss of ownership on something that sits in what was once the original grounds of the house and garden. That seems a bigger impediment than a lease of the sky. But I understand the way this appears to work and you just have to find a mortgage which shouldn't really be any harder than finding a buyer. But who knows. Could be that it rents out. 

I've found out what I needed to. I won't be on here now for further answers so you have my appreciation and any other answers you place can be for the benefit of others in the future. Very illuminating if not particularly settling. Thank you all.