Freehold purchased - do I need to merge titles?

dr_who_3

We recently bought the freehold to our property so we now own both the land and the house. We’ve finally had the paperwork back from land registry but now have two title deeds - one for the land (freehold) and one for the house (which still states leasehold). 

So we are now essentially our own leaseholders?
Do I need to do something more to merge the two titles so the whole property shows as freehold like our previous house?
thanks! 

eddddy

dr_who_3 said:

...so we now own both the land and the house.

As an aside, the above isn't really a good way of explaining what has happened (except in very unusual cases). It's better to say that you own both the freehold of the property and the leasehold of the property.

There isn't usually any need to merge the freehold and leasehold titles - it doesn't really give much benefit.

And occasionally the leasehold title gives you some rights which aren't present in the freehold title - so you might lose those rights, if you merge them. But a solicitor would advise you about that in advance.


Also, if you have a mortgage, it will be on the leasehold title - so if you want to merge the titles (and extinguish the lease) you'd have to get a new mortgage on the freehold title. You'd have to discuss with your mortgage lender how much hassle that would be.




Edit to add...

But there might be other considerations - for example if the lease is getting short, or it has onerous ground rent terms - and it's preventing you from re-mortgaging at a good rate.

propertyrental

As edddy says, no real need, though I'd probably merge them just to be 'tidy' and perhaps simplify a future sale.

But yes, as well as LR costs you might need to re-mortgage so check that out with your lender first.

I think this may be relevant:

3. Determination: on merger
Merger occurs where a leasehold estate in land, together with the reversionary estate, come into the same ownership and are held in the same capacity. The lease is absorbed by the reversionary estate and thus determined. There must also be a clear intention to merge the estates which means an application should expressly be made for this by the tenant applying for (one of the below):

• cancellation of the notice of the lease in form CN1

• closure of the registered leasehold title in form AP1

• merger of an unregistered leasehold estate as part of an application for first registration of the reversionary estate in form FR1 as applicable

https://www.gov.uk/government/publications/leases-determination/practice-guide-26-leases-determination.

More explanation here:

https://www.wilsonbrowne.co.uk/news/land-registry-clarifies-procedure-for-merging-a-leasehold-title-into-the-reversion/

EssexHebridean

The mortgage question is a simple one in most cases -  a Deed of Substituted Security from the lender would deal with the issue of moving the existing charge to the new title.