Freehold and leasehold house

Lishah

Hi. I’m a first time buyer. I have just been informed by my solicitor that the property we are looking to buy although is freehold has two leases on it. So there is both a head lease and sublease. 

The freehold and sublease is in the name of the current owners who have lived there for around 40 years. 

The issue is the head lease for which the owners have no information of. The has been an enquiry made to land registry to see if they have any information on this but now sure how long it will take for them to get back to us. 

The solicitors have taken an indemnity insurance. 

Has anyone else had or heard of an similar experiences to this? 

eddddy

It's come up on this board a couple of times before. Sublessees seem to have bought the freehold of their house, even though there is an intermediate lease (or head lease).

The conclusion has generally been that it wasn't a particularly useful thing to do. Perhaps the freehold was being offered cheaply, and somebody bought it without discussing it with a solicitor.

Is the indemnity insurance because the head leaseholder can't be traced?


It might be possible to 'regularise' the situation by doing a 'statutory freehold enfranchisement' (also called 'buying the freehold'). Essentially, you'd be buying the freehold from yourself, but you'd also get the Head Lease interest. i.e. The head lease would disappear.

You'd need to discuss it with a specialist solicitor. A conveyancing solicitor probably won't know anything about this stuff.

Lishah

Then you for your reply. 

The current owners don’t no of any head lease and don’t have any information for it. 

We are still waiting to hear back from land registry to see if they hold any information. 

Would you do ‘statutory freehold enfranchisement’ before you buy the property or after? 

eddddy

Lishah said:

Would you do ‘statutory freehold enfranchisement’ before you buy the property or after? 

It might take a few months to complete the process, so I doubt you'd want to hold up the purchase that long.

But you have to have owned the house for 2 years before you can start the process - so you'd need to wait 2 years.

Unless... the current owners start the process before selling, and you complete it afterwards.



But you would really need to talk through the details with a specialist solicitor, if you want to do this.

For example, you might need to buy the freehold and leasehold in different names. (e.g. you and your partner jointly own the leasehold, but only you own the freehold).

As I'm not sure that 'statutory enfranchisement' would work, if you were 'buying the freehold from yourself'.

Lishah

Oh ok. Thank you for ur response. I have read online land registry have a back log of enquiries so not sure how long it will take to get a reaponse regarding the head lease. But I will try look into statutory enfranchisement.