Agent misled and advertised a property as freehold - 3 months later I am finding out it is leasehold

theonematt

As the title suggests, a property I am purchasing was advertised as freehold, and I have gone into the sale process with this in mind - including my mortgage quote being quoted on this basis. 

I have now received contracts only to find it is leasehold (with 954 years left, but that's beside the point). This is not impacting my wish to buy the property, but has resulted in my solicitor having to speak to the mortgage lender and may result in potentially needing to be issued a new mortgage offer - which is causing unnecessary delays. 

Do I have any form of rights here, is there a complaints process I should be following? What could I expect as a result from complaining about this? Any advice welcome. 

Thanks! 

user1977

theonematt said:

(with 954 years left, but that's beside the point) 

It's not really beside the point at all - an ultra-long lease like that is (usually) nearasdamnit freehold, which is why sellers often are under the impression that is freehold (because they're not worrying about the number of years left, onerous conditions, any significant groundrent, etc). Your lender is very unlikely to care about it.

Emmia

user1977 said:

theonematt said:

(with 954 years left, but that's beside the point) 

It's not really beside the point at all - an ultra-long lease like that is (usually) nearasdamnit freehold, which is why sellers often are under the impression that is freehold (because they're not worrying about the number of years left, onerous conditions, any significant groundrent, etc). Your lender is very unlikely to care about it.

But, it still has all the downsides of leasehold, asking permission from management companies, no real control over maintenance schedules. 

I have leasehold already, and if/when buying again it would be freehold, a leasehold even on a 945 year lease would be a "no" and I'd pull out of the purchase.

lika_86

Make a complaint but don't expect much. A friend complained about something the agents got wrong and got given a gift voucher for a local restaurant as a gesture of goodwill but they pulled out as a result and so I think the agents wanted to potentially have them as buyers for another property. Ultimately there was likely a caveat that you should check to verify the details in the advert.

user1977

Emmia said:

user1977 said:

theonematt said:

(with 954 years left, but that's beside the point) 

It's not really beside the point at all - an ultra-long lease like that is (usually) nearasdamnit freehold, which is why sellers often are under the impression that is freehold (because they're not worrying about the number of years left, onerous conditions, any significant groundrent, etc). Your lender is very unlikely to care about it.

But, it still has all the downsides of leasehold, asking permission from management companies, no real control over maintenance schedules. 

It depends on the terms of the lease. As above, generally ultra-long leases have in normal circumstances little need for the leaseholder to get involved with the freeholders.

bluelad1927

Having sold a leasehold property 18 months ago with a similar 900+ yrs,  living with the lease and its £20 per year ground rent were no problem. However, there were added fees (not insignificant), and time consuming issues when it came to selling.

eddddy

Emmia said:
But, it still has all the downsides of leasehold, asking permission from management companies, no real control over maintenance schedules. 

I have leasehold already, and if/when buying again it would be freehold, a leasehold even on a 945 year lease would be a "no" and I'd pull out of the purchase.

With a house with 900+ year lease, it's very unlikely that the freeholder is involved with maintenance.

But you might need things like... consent for alterations (with an admin free payable), and you might have to do stuff like provide details of your buildings insurance to the freeholder (and pay another admin fee for that).

theonematt said:

Do I have any form of rights here, is there a complaints process I should be following? What could I expect as a result from complaining about this? Any advice welcome. 

The Property Ombudsman (and the law) says that the estate agent must tell you material information which they knew or should have known.

Possible ways the estate agent should have known that the property was leasehold include:

• If it's registered with land registry - then they should have downloaded the title

• If they know the area and/or have sold similar houses nearby - which were leasehold (Are they local estate agents?)

• They should have asked the seller. Even if the seller said it was freehold, but the estate agent had their doubts, then the estate agent should have investigated further

You can complain to whichever redress scheme the Estate Agent is a member of (The Property Ombudsman or The Property Redress Scheme.)  They have the authority to order the Estate Agent to pay you compensation for your losses resulting from wrong-doing by the agent.

MultiFuelBurner

This is why you have solicitors to pick up these errors and get everything in order for exchange and completion.

It's annoying but better picked up now that further down the line but as for compensation this is a sad thing that's crept into daily UK life. Something goes wrong where's my compo cheque.

user1977

And bear in mind that a freehold property can come with restrictions and liabilities too. Devil is in the detail (and it doesn't sound like you've had any of that yet).

theonematt

MultiFuelBurner said:

This is why you have solicitors to pick up these errors and get everything in order for exchange and completion.

It's annoying but better picked up now that further down the line but as for compensation this is a sad thing that's crept into daily UK life. Something goes wrong where's my compo cheque.

On the contrary, I'm half convinced this didn't just "go wrong" but that the agent likely listed as freehold given the length of the lease to not put off buyers. I could be wrong, but I don't trust estate agents as far as I can throw them, and they keep getting away with bad practices. 

km1500

I believe most if not all estate agents details specifically say subject to contract.

apart from anything else this means that they have done their best but cannot guarantee everything they say is exactly right they presumably have been told by the vendor.