Missing Lease

Fat.badger_2

Wonder if anyone can help?

I am trying to buy a leasehold property and after waiting months I’m now told that the lease is ‘missing’.

The original lease is on the Land Registry but it’s listed as a ‘closed leasehold’

The lease was informally extended about 10 years ago so wonder if that varies the original lease?

I’m being advised that we may proceed with a neighbouring property lease and indemnity policy.

However very uncomfortable with this as I think it would affect future saleability and most importantly the lease will need extending in around 5 or so years time which I had factored in.

without the lease however it would seem it would be impossible to calculate a premium when looking to extend because you don’t know what the ground rent structure looks like?

Just seems like a recipe for freeholder to extort more money from you.

is it wise to just walk away? So annoying spent months waiting and spent £ks to this point.

bouicca21

I’m not sure what a closed leasehold is. When I was trying to buy a flat with a missing lease my solicitor negotiated a binding agreement with the freeholder that a new lease (mirroring those of neighbouring flats) would be drawn up on completion (via a surrender and regrant).  The cost was to be borne by the vendor and an appropriate allowance was made for that.  There was a deed of variation that stated the length of the lease, and ground rent, but did not recite anything else that would have been In the original lease.

I don’t know whether a similar arrangement would satisfy a mortgage lender; I was a cash buyer.

Land_Registry

Fat.badger_2 said:

Wonder if anyone can help?

I am trying to buy a leasehold property and after waiting months I’m now told that the lease is ‘missing’.

The original lease is on the Land Registry but it’s listed as a ‘closed leasehold’

The lease was informally extended about 10 years ago so wonder if that varies the original lease?

I’m being advised that we may proceed with a neighbouring property lease and indemnity policy.

However very uncomfortable with this as I think it would affect future saleability and most importantly the lease will need extending in around 5 or so years time which I had factored in.

without the lease however it would seem it would be impossible to calculate a premium when looking to extend because you don’t know what the ground rent structure looks like?

Just seems like a recipe for freeholder to extort more money from you.

is it wise to just walk away? So annoying spent months waiting and spent £ks to this point.

I think by closed leasehold you are referring to the original lease title which will have been closed when the variation to extend the term was created. That variation effectively surrenders the old lease and regrants it with a longer term. The old leasehold title is closed and a new one started. The new one relies on the old lease and new deed and refers to both. 

Responsibility for holding leases lies with the landlord and tenant. Yes, when registered, copies are ‘filed’ with us but they can, fortunately rarely, go missing from a paper file or perhaps were misfiled. 

The advice you have been given may be sound/sufficient but as bouicca21 posts much may depend on any mortgage lender. And of course getting a new lease drawn up is also an option. 

I doubt if it’s impossible to do a calculation - you can use the other leases and negotiate anyway. Both sides use the same calculator I believe. There’s no extortion, just negotiation although do appreciate the further into the deal you go the more likely you are to want to see it through 

eddddy

Fat.badger_2 said:

without the lease however it would seem it would be impossible to calculate a premium when looking to extend because you don’t know what the ground rent structure looks like?

Assuming you go for a Statutory Lease Extension - you would negotiate the premium with the freeholder.

• So you would negotiate based on what you believe the ground rent structure to be (based on other leases etc)

• If the freeholder disagrees, they would negotiate based on what they believed the ground rent structure to be 

Hopefully, you would agree on a compromise.

If you can't agree, it would go to tribunal (which might cost each party thousands in fees). The tribunal would probably make a decision based on 'the balance of probabilities'. (i.e. Who is more likely to be correct - you or the freeholder)



That's broadly how Statutory Lease Extensions work at the moment, but the government are discussing reforms which might change the process.