Intermediary Leashold Title?

Davewils82

Hi,

I've just had a letter put through my door saying the following (personal details removed by me)

We act for xxxxx who is the owner of the Intermediary Leashold Title (ILT) to your property and is entitled to receive ground rent from you.

Please be aware that our client does not own nor indeed claim to have any interest in the Freehold Title to your property. The Freehold Title is owned by an unknown third party.

Subject to our contract, our client would prefer to dispose of his interest in the ILT to you property to you if terms can be agreed so as to relieve himself and his family of ongoing administrative obligations. 

Accordingly, we are instructed to offer you our clients interest in the ILT to your property on the following terms:

1. A payment of £50.00 to our client payable on completion of the transfer in your favour
2. Payment of our clients costs in the sum  of £500+VAT. 
3. We will produce evidence of our client's ownership of the ILT but we will not deal with not respond to ANY enquiries relating to the property/and/or the documentation provided. 
4. We will produce a standard form transfer deed. 

If you wish to proceed, etc etc, 

If we nothing from you or any representative on your behalf within 21 days of this letter then our client will consider his position BUT for the avoidance of doubt he will remain entitled to receive the Ground Rent sepcified in the lease an will continue to require full compliance with the covenants in the Lease. 

So, some initial thoughts from myself are :

• I'm not initerested in paying his legal costs because this ILT is a burden to him.
• I have no paperwork from the purchase of this house that mentions an ILT. Just that it's a leashold where the original freehold owner is unknown.
• The house is a Victorian terrace house, not a flat. 

Does anyone else have experience of similar? 

Davewils82

I would also like to know how you can hold the ILT and not know the holder of the Freehold? 

eddddy

Davewils82 said:

I would also like to know how you can hold the ILT and not know the holder of the Freehold? 

That bit is absolutely possible. 

For example..

• The freehold belonged to somebody who is now dead, and the intermediate leaseholder has no idea who inherited it.

• The freehold belonged to a company that no longer exists, and the intermediate leaseholder has no idea who ownership of the freehold passed to, when the company dissolved.

user1977

Davewils82 said:

I would also like to know how you can hold the ILT and not know the holder of the Freehold? 

In the same that you can hold any leasehold title and have a freeholder who is "missing in action" (common where the freehold is worth peanuts and at some stage in the past people have lost interest).

eddddy

Davewils82 said:

So, some initial thoughts from myself are :

• I'm not initerested in paying his legal costs because this ILT is a burden to him.
• I have no paperwork from the purchase of this house that mentions an ILT. Just that it's a leashold where the original freehold owner is unknown.
• The house is a Victorian terrace house, not a flat. 

Does anyone else have experience of similar? 

• When you bought the house, did your solicitor ever mention a "head lease" or an "intermediate lease" - or that you had a "sub-lease"?

• Does your lease mention a "head lease" or an "intermediate lease"?

• Have you searched Land Registry to see what titles are registered for your house (and their associated plans)? Your lease and the intermediate lease might be registered there. You can start here:  https://www.gov.uk/search-property-information-land-registry

Assuming the letter is legitimate...

The pros of 'buying out' the intermediate lease are:

• You won't have to pay ground rent to the intermediate leaseholder
• You probably won't be bound by covenants (rules) in your lease - an example covenant might be that you need consent to alter the house, build an extension etc

The cons of 'buying out' the intermediate lease are:

• There might be a different set of covenants (rules) in the intermediate lease - which you might become bound by
• There might be ground rent to pay to the freeholder

i.e. You'll lose the set of 'rules and regulations' (covenants) in your current lease, but you might be taking on another set of  'rules and regulations' (covenants) in the intermediate lease.

So maybe you need to compare them to see if you're better off or worse off.

You should probably instruct a solicitor to look into this.


An alternative approach is to ignore this offer, and buy the freehold using 'Statutory Enfranchisement' - but your legal costs will probably be much higher.