Buying a Freehold House with a unregistered leasehold against it.

Land_Registry

Gal-axy said:

Hi, we have passed allthe paperwork to our solicitors but I believe we would be the freeholders as we purchased as freehold property? The lease is in the original individuals name whom we presume must be deceased by now. 
Hoping @Land_Registry can help!

Indemnity policies are 'standard' nowadays but may not be acceptable to all conveyancers or perhaps more importantly the buyer's mortgage lender-to-be. The policy covers against the risk rather than removes it.
Different conveyancers or again more specifically different mortgage products/lenders have different risk assessments in play hence you might have not had an issue re that risk when you bought but the new buyer does. 
Whether or not the lease can be removed from the register depends on the facts and supporting evidence presented in support of any application to cancel (form CN1)
Those facts and supporting evidence will be unique to you and it seems you have set most of them out in your post. You know when the lease was granted and have those details so the facts need to work forward from there re what happened re the lease/leaseholders and more. Your 'facts' may end with just what your own experience has been re the leased demise (premises) and whether rent has bene paid, the tenant has been present and more.
Your conveyancer is your legal representative and they need to consider how the law treats such a leasehold interest with regards for example no rent, no tenant etc etc - see PG 26 for registration guidance but it's the legal position, and not the registration one, that matters here if you are to secure the noted lease's removal from the register

Gal-axy

Thank you very much for the detailed and as always informative reply @Land_Registry, 👍

☝️this is the solicitors suggestion, however it seems uncertain at the least and the time issue is worrying re collapse of the sale chain. 
I know every case is unique but does anyone have a positive experience or suggestion please 🙏!

Land_Registry

Gal-axy said:

Thank you very much for the detailed and as always informative reply @Land_Registry, 👍

☝️this is the solicitors suggestion, however it seems uncertain at the least and the time issue is worrying re collapse of the sale chain. 
I know every case is unique but does anyone have a positive experience or suggestion please 🙏!

The 10 day period refers to a request to expedite (fast-track) the application being processed. So 10 days within which processing should start.
Once processing starts then a casework considers what has been submitted for accuracy and completeness inc if a copy of the lease has been provided. A senior technician will then consider the facts as presented to decide if they are sufficient in law to confirm that the lease has been surrendered for example or whatever it is the application/facts are trying to present.
Notices are an option if the facts and supporting evidence are sufficient and of course there's 1 year left on the current term.

Gal-axy

Generally speaking - is there any precedent in your knowledge where a cn1 application has been made and a noted lease has been successful removed from the register AND crucially within a short timescale? (One of the people lower in the chain has now completed on their sale and is essentially homeless/on a friends sofa, We're all banking on this now!)

Land_Registry

Gal-axy said:

Generally speaking - is there any precedent in your knowledge where a cn1 application has been made and a noted lease has been successful removed from the register AND crucially within a short timescale? (One of the people lower in the chain has now completed on their sale and is essentially homeless/on a friends sofa, We're all banking on this now!)

In my experience yes but everything needs to align to allow that to happen. And by align I mean that the legal Qs have all been answered so as to show that the lease is, in law, no more. 
I would suggest from the quote you have shared that the conveyancer suspects that is not the case hence referencing "assignments present and an unexpired term of 1 year" 
Whilst actually removing it from the register is our decision that's only made if the legal aspects have been covered

Gal-axy

Right understood, as suspected this is not a straightforward process, so I think in reality our best bet is for the buyer to convince the lawyer to accept the indemnity policy or find another one that does or failing that we need to find another buyer!

Gal-axy

Unless someone else can chime in with a positive experience in a similar situation?!!

Land_Registry

Gal-axy said:

Right understood, as suspected this is not a straightforward process, so I think in reality our best bet is for the buyer to convince the lawyer to accept the indemnity policy or find another one that does or failing that we need to find another buyer!

Ok but the reality is probably that it’s the buyer’s lender who won’t or can’t accept the risk even with an indemnity policy. The conveyancer’s hands may well be tied. So if you are asking should we find another buyer then you need to understand the conveyancer’s decision and whether there’s any flexibility. 

Your own conveyancer is trying to remove that risk by having the lease cancelled. If that can’t happen, and that’s because of how the law protects the lessee’s interest, then the risk remains 
And whilst others may have positive experiences unless they are identical to your own scenario they’re not going to change anything for your buyer’s conveyancer or lender. 

Gal-axy

Yes, it seems we really are clutching at straws here! Appreciate the honest assessment, thanks again. 
Lets see what transpires, will update with any progress 👍

Sunshineandbeaches12

Hi! How did you get on with this in the end? We are in the exact same position but with buying a property that is freehold but with unregistered lease. 

Lenders have said they will allow for an indemnity