Buying a leasehold house

eddddy

angelasocks said:

Thanks gwynlas - I found out who owns the freehold (downloaded from Land Registry).  I rang solicitor today who told me I won't find out about the rules of the lease until enquiry stage.

The seller might have a copy of their lease (or the original from the 1950s). You could ask them - via the estate agent - if they'll give you a copy.

But it might be 30 or 40 pages long, and it might even be bound into a booklet - so it might be a hassle for the seller to scan or photocopy.




Or if you're really desperate for a copy of the lease...

• You should be able to get a copy of it from Land Registry within about 7 days, by posting an OC2 form and paying £7

• "Property Professionals" (like solicitors) pay a subscription to have access to Land Registry's portal, which allows them to get copies of some leases immediately (if they're already stored electronically by Land Registry, and below a certain size.)

• If you have a friendly solicitor - you could ask them if they can get you a copy immediately (in return for a fee)
• Or there are some company websites that seem to have access to the portal - so you can pay them (a slightly extortionate) fee to try to get a copy. I used one once - but they all seem like slightly dodgy companies. 

SensibleSarah

I live in a leasehold house (bought in 2010) and I have a copy of my lease (about 20 pages long) - it was sent on by my solicitor upon completion so I didn't see it before that - but the solicitor looked through it and said there was nothing in there I needed to worry about covenants-wise, so I took them at their word and it was fine. 950+ years left on the lease, no ground rent. 
 
My situation wasn't dissimilar - I was led to believe the house (built 1935) was freehold (vendors were relatives of the deceased leaseholder and they'd never lived in the property) and it was actually quite a long way in before it was revealed that it was leasehold - just before exchange. I would never have offered on it in the first place if I'd have known to be honest. But by the time I found out, I'd already paid for surveys, searches etc and I couldn't afford to start again with a different property - so I just bit the bullet and proceeded anyway. I did a fair bit of reading up on leasehold etc in the meantime.

The freeholder turned out to be the local council, who have since offered me the freehold (twice - with the price going up each time), presumably as a way to try and scrape back some cash - the house obviously makes them nothing as it is. Currently, it makes no sense for me to buy it, but I may well do in the next few years as I either want to sell (and being freehold makes it more attractive to more buyers even if it doesn't add any actual value) or do loads of work, which I'd probably need to ask the freeholder's permission for, and that has an associated cost. If I was planning on staying here for life or didn't want to do some major works, I'd not bother buying it. 

angelasocks

Thanks Sarah surely it makes more sense to buy now if the price is going up - maybe that's a personal thing for you.

I've been doing some door knocking and most of the people in the street have bought their freehold.  Of the ones I spoke to they said it was quite straightforward.

One chap kindly gave me the contact details of the freeholder so I rang him and he confirmed he did own the freehold on the property I'm buying and that he would be happy selling it to me for around £600 which was similar to what the others paid.

What I can't find out is do I have to wait 2 years if I'm buying informally or does that only apply to the formal route?

Hoping the TA7 form should reveal more.

Thank you all

eddddy

angelasocks said:

What I can't find out is do I have to wait 2 years if I'm buying informally or does that only apply to the formal route?

No - you don't have to wait 2 years if you're buying informally. You can buy at any time.


But also be aware that, until you sign a contract with the freeholder, the freeholder can change their mind at any time. For example, they might double the price, or even decide not to sell the freehold at all.

And I suspect that the freeholder will expect you to pay their legal fees, as well as your own. Maybe allow £1.5k to £2k for that.

angelasocks

Thanks Eddddy good to hear I don't have to wait 2 years.  

Didn't sound like he made anything difficult when selling to the other leaseholders - but yes something to consider definitely.

angelasocks

Sorry another question.  If freeholder is willing to sell me freehold can I do the freehold purchase at the same time as I'm buying the house? My solicitor wasn't much help seemed to thing it was an odd request.

Thanks again

NameUnavailable

angelasocks said:

Sorry another question.  If freeholder is willing to sell me freehold can I do the freehold purchase at the same time as I'm buying the house? My solicitor wasn't much help seemed to thing it was an odd request.

Thanks again

As long as you agree the price/terms with the freeholder then of course you can. It would be two separate transactions however so you would need to try to ensure you time them correctly - you could otherwise end up with the freehold but no house (if the sale fell through) or the house but not the freehold (although you would complete on that later so less of an issue).

eddddy

angelasocks said:

Sorry another question.  If freeholder is willing to sell me freehold can I do the freehold purchase at the same time as I'm buying the house? My solicitor wasn't much help seemed to thing it was an odd request.

Thanks again

Yes - if you want.

But there are some things to consider - and some potential complexities.

It would be easier to explain the considerations and complexities, if you gave some more info...

• Would you only want to buy the house, if you can buy both the leasehold and freehold? i.e. You would walk away if you can't buy the freehold.

• Do you want to merge the freehold and leasehold titles on completion - i.e. Just be left with a freehold house, and no lease?

• Are you buying with a mortgage?

angelasocks

Thanks Edddy if there was no way I could buy the freehold no I would walk away.  

The freeholder has already told me he will sell it.  No guarantee he won't change his mind or be difficult in which case I'd be left with the formal route and a 2 year wait and higher legal bills

Merging the two sounds better rather than owning 2 tenures (if I've understood you correctly) 

I'm a cash buyer having sold my other house and now in rented.

Thanks again Eddddy and everyone just trying to get my head around it all.  

eddddy

OK - it seems you understand all the risks. So it's really just your personal choice whether you buy both titles at the same time or at different times.

(If you did want to buy both titles at the same time, you'd probably instruct your solicitor to make them linked transactions - so you don't end up with the freehold and not the leasehold.)

The only downside of buying the freehold later is that you will be bound by the leasehold covenants in the meantime.