TR1 form - buyer completes panel 10?

arciere

Our neighbours are in the process of selling their flat along with their share of the freehold.
Their solicitors have just written to us asking us to sign the pre-filled TR1 form along with a couple of other documents.

However, upon reviewing the form, I noticed that panel 10 (declaration of trust) was blank. When I enquired, I was told that this is for the buyer to complete.

How can that be? Surely I cannot sign something with a blank section that could, in principle, reduce our share of the freehold to 1% or add conditions that we don't agree with? Is this standard practice when a share of the freehold is transferred?

TBG01

Panel 10 has nothing to do with you or the freehold.

Unsurprisingly the Solicitor is correct. 

arciere

TBG01 said:

Panel 10 has nothing to do with you or the freehold.

Unsurprisingly the Solicitor is correct. 

Would you mind explaining?

TBG01

Because you have no reason for knowing how they wish to hold the property.

Why would or should you have a say in whether they hold the property/freehold in accordance with a Declaration of Trust (would you be happy with some stranger knowing your financial arrangements?) or why would or should you have a say in them holding it as joints tenants meaning when one party dies their 50% of the property transfer to the surviving party.

As I've already pointed out it's got nothing to do with the freehold.

The Solicitor isn't going to risk their job and reputation trying swindle you out of the freehold.

arciere

I am sorry but it's still not clear to me.

The TR1 form is transferring the property from the current owners (2, the selling owners, + 2, we non-selling owners) to the new owner plus us (1 + 2).

From what I can see, this is not a form that affects their flat alone, but the entire 'block of flats' that we are also owners of.

Therefore, whatever they decide to do with how they want to hold their property will also affect us because, as I said previously, the transfer is also being made from us to us (plus the new owner).

So how is it possible that they can decide what to do with the transfer, and we can't? What if they want to have all joint owners (which is, the new buyer plus us 2) as joint tenants, but we want to be tenants in common instead, for obvious reasons?

Unless I'm missing something obvious here, and if that's the case I apologise, if this has got nothing to do with the freehold, why are we requested to sign it, with all our names as transferors and transferees?

Tiglet2

The sellers will need to complete two TR1's. 

One TR1 is transferring the leasehold flat and the other TR1 is transferring the freehold land and building. 

The buyer can hold the leasehold part of their purchase as either Joint Tenants or Tenants in Common and it will be for them to decide which they prefer, 

You would not be sent the TR1 to sign for the leasehold transfer as this is between the seller and buyer only.

The freehold transfer however is to remove the current freeholders (seller) from the freehold title and to add the new freeholder (buyer), along with the other current freeholders.

You would need to look at the freehold title register to see how the freehold building/land is held currently.  There would be a sole proprietor restriction on the title (and probably a Declaration of Trust) if it is held as Tenants in Common.  If there is no sole proprietor restriction, then the freehold is held as Joint Tenants.  Whatever it currently is, is what it will still be when the flat is transferred.  You cannot change this without the agreement of all other freeholders, who would each need their own legal representation.

arciere

There seems to be some confusion.

The property includes two flats (flat 1 and flat 2). Flat 1 is being sold, we live in flat 2 and we are not selling.

Currently, the property is held jointly as 'Tenants in Common', in 4 names (2+2), with a specified share of 50% each 'couple'.

Now, the form that we are asked to fill in is a TR1 form for the transfer of the property of the entire building (freehold). The transfer is being made as follows:

From owners 1a,1b (of flat 1) and 2a, 2b (of flat 2) to new 1 (buyer of flat 1) and 2a, 2b (existing owners of flat 2).

Therefore, the TR1 form that we were presented has 4 transferors and 3 transferees.

Panel 10 (Declaration of trust) was left blank for the buyer of Flat 1 to complete.

So, if we had to follow the solicitor's advice and sign the form without seeing what they will put in panel 10, potentially we could end up having a 5% share of the freehold and conditions that we don't agree with?

Why do the buyers get to say how this should be done, and not us, as the current owners?

Tiglet2

arciere said:

There seems to be some confusion.

The property includes two flats (flat 1 and flat 2). Flat 1 is being sold, we live in flat 2 and we are not selling.

Currently, the property is held jointly as 'Tenants in Common', in 4 names (2+2), with a specified share of 50% each 'couple'.

Now, the form that we are asked to fill in is a TR1 form for the transfer of the property of the entire building (freehold). The transfer is being made as follows:

From owners 1a,1b (of flat 1) and 2a, 2b (of flat 2) to new 1 (buyer of flat 1) and 2a, 2b (existing owners of flat 2).

Therefore, the TR1 form that we were presented has 4 transferors and 3 transferees.

Panel 10 (Declaration of trust) was left blank for the buyer of Flat 1 to complete.

So, if we had to follow the solicitor's advice and sign the form without seeing what they will put in panel 10, potentially we could end up having a 5% share of the freehold and conditions that we don't agree with?

Why do the buyers get to say how this should be done, and not us, as the current owners?

It's not really "per couple", it's per flat.  So flat 1 owns 50% of the freehold and flat 2 owns 50% of the freehold.  They won't be able to change those percentages, unless you agree to it.

arciere

Tiglet2 said:

arciere said:

There seems to be some confusion.

The property includes two flats (flat 1 and flat 2). Flat 1 is being sold, we live in flat 2 and we are not selling.

Currently, the property is held jointly as 'Tenants in Common', in 4 names (2+2), with a specified share of 50% each 'couple'.

Now, the form that we are asked to fill in is a TR1 form for the transfer of the property of the entire building (freehold). The transfer is being made as follows:

From owners 1a,1b (of flat 1) and 2a, 2b (of flat 2) to new 1 (buyer of flat 1) and 2a, 2b (existing owners of flat 2).

Therefore, the TR1 form that we were presented has 4 transferors and 3 transferees.

Panel 10 (Declaration of trust) was left blank for the buyer of Flat 1 to complete.

So, if we had to follow the solicitor's advice and sign the form without seeing what they will put in panel 10, potentially we could end up having a 5% share of the freehold and conditions that we don't agree with?

Why do the buyers get to say how this should be done, and not us, as the current owners?

It's not really "per couple", it's per flat.  So flat 1 owns 50% of the freehold and flat 2 owns 50% of the freehold.  They won't be able to change those percentages, unless you agree to it.

Yes, it's "per flat", but in the declaration of trust it doesn't say "per flat", it says "50% Mr 1 and Mrs 1 and 50% Mr 2 and Mrs 2". So, technically, each 'couple' owns a 50% share. It might be unusual, I don't know, but this is what our solicitors did when we bought the properties some time ago.

Now, I know that they won't be able to change those percentages unless we agree to it. But isn't the declaration of trust/panel 10 the place where someone would agree to what percentage they're to hold a property, like we did when we purchased it? And if that's a yes, wouldn't it be a risk to follow the solicitor's advice and basically sign a blank cheque?

anselld

Just tell them you insist on section 10 being completed before signing.  There is no reason why section 10 cannot be completed in advance.

arciere

anselld said:

Just tell them you insist on section 10 being completed before signing.  There is no reason why section 10 cannot be completed in advance.

Thanks, their solicitor made me sound like I was asking for the moon ("it is for the buyer to fill in section 10").
I pointed out that, technically, we are also 'buyers' (and current owners that are not selling and have no intentions to agree to anything that could potentially go against our interests), so I can't see why they get to decide how the property should be held and we can't. They still haven't responded and I'm considering whether their offer to "represent us, free if charge", is even worth considering.