Freehold nightmare back to haunt me - on Land Reg on 0.1% share, help!

GirlScout

Hi Guys

First time poster, please be gentle!  I am in a pickle and I need some straight shooting.  It's a complicated tale, I'll try and keep it to the point but this is LONG, I'm trying to include all the salient facts.  And I know, know, this man saw me coming a mile off, believe me I'm so cross with myself, but what I need help with is getting myself out of this mess.

- I bought my leasehold flat in 2004, extended lease to 125 years on purchase, lived in it for several years, then remortgaged to BTL and it lets like a dream, been a Landlord since 2007. It's a maisonette with a flat below me.  He - downstairs - was also a leaseholder with a short lease (less than 80 years).  I was young, a first time buyer, and wet behind the ears, he was a professional landlord with dozens of properties.

- Our freeholder was flaky, ground rent and service charge cheques returned uncashed and she'd failed to insure the building, had to have Absentee LL Indeminity Insurance

- In 2007 the flat owner below me floated the idea of buying the freehold.  He is a professional (miserly!) LL with many flats including overseas.  He said I wouldn't be able to sell unless this was resolved etc.

- Long story short, he offered to do all the leg work and pay the costs if I went along with this process, and I *could* purchase my share of the freehold at a later date.  He was very charming and friendly etc.

- He suggested we use his solicitors, who we jointly instructed (however they did all his property work, so this job was an anomoly for them I realise, and really - despite me signing T&Cs he was their 'client').  We had two independent valuations with my share valued at 10% of his (due to his short lease).  Our freeholder rejected both offers. What with valuation costs and freeholder suddenly demanding all the back ground rent etc, this was starting to cost me money when he assured me it wouldn't.

- Solicitor said our option was Collective Enfranchisement, force her to sell.  At this point I put my foot down and said I wasn't prepared to go any further unless other party and I had a legal agreement in writing drawn up by solicitor making it plain that whilst I was happy to go along with this process I wasn't buying anything, he just needed me to get her to sell so he could extend his lease and I could buy my share at a later date if I wanted to. I said, 'All I need is a non absentee freeholder'.  This happened several times from here on, I kept getting sent letters, he said yes don't worry we'll put it in writing, and nothing happened.

- Solicitor (I was so naive) clearly saw me as the useful idiot and this process rumbled along.  I wasn't really copied in on all the paper work and to ing and froing between solicitor and surveyor and the other side as they slogged it out over the price.  From 2010 to 2023 I did not even know what my share was sold for, despite repeated asking, the deal was done without me seeing anything, in fact I only finally saw the completion statement earlier this year.  My share was sold for £2,500 with the same again in costs, so about £4,800 all in.

- 2009 - 2010 I was struck down with a very very serious life threatening illness (I won't put all the details) but it was a car crash of endocrine disease and cancer.  This meant my whole system was 'running too fast' and whilst hard to prove, I was prone to making rash decisions and it is well documented this illness makes it super hard to assess risk.  I honestly swear on the bible I can barely remember this period at all, I was extremely unwell, and continued to be in and out of hospital until 2019.

- 5 days before my official diagnosis I signed a loan agreement drawn up by flat owner downstairs (not the solicitor) that said I had to buy back my share of the freehold plus costs and I would pay him 5% interest on the debt (bear in mind nobody had told me what the debt was and the agreement doesn't say), it said that he would extend his lease to 125 years (he in fact extended to 999), and that I would until I paid him back own 0.1% of the freehold.  This document was witnessed by my brother.  I honestly have no memory of this whatsoever and within a few weeks was in and out of hospital gravely unwell.  I was never given a copy of this document, nor the completion statement, nothing at all.

- He then sent this to OUR solicitor (nobody ever mentioned this to me, advised me to get independent advice or indeed flagged up a conflict) and that solicitor then signed the TR1 and title transfer forms on my behalf and put me on the Land Reg (I had no idea) on the basis of a 0.1% share.

- To my complete surprise late last year I was sent an email by the owner downstairs attaching this loan agreement and a spreadsheet saying I owed him £24k. Since I queried what the hell he was talking about, I have been getting emails from him that are just a wall of abuse, expletives, lies, insults etc etc and no paperwork. All he says is 'SELL YOUR FLAT AND PAY ME!'.

- I tried to remortgage (interest rates are killing me) and the conveyancing solicitor discovered I'm on the Land Reg as a tenant in common on a 0.1% share, so this made me ineligble for a BTL mortgage.  She said in all her 30 years in practice she'd never seen anything so outrageous and I needed a lawyer ASAP.

- Seven laywers later (nobody knows what to advise me as nobody has seen this before) I've managed to find a property litigator (his day job is fighting about commerical property contracts) and with his help we've managed to get the documents out of the other party.  We now know what my share actually cost.

- The arguments we've made is 
a) I've never denied I said I'd buy my share, my share cost £2,500 freehold and £2,300 costs and I'm prepared to pay £5k.

b) we are not convinced the contract I signed is legally binding 

c) contracts about land must be a deed and the contract I signed is not a deed but a dubious loan agreement, contracts about land cannot be witnessed by a blood relative and mine is witnessed by my brother

d) I did not sign the land reg docs

e) I was super duper ill and there's a question mark about my capacity

f) we're not convinced freehold interest can be apportioned in this way

g) even on the face of it the loan agreement does not allow for compound interest so in his very best case the principle sum is £8k not £24k, 

h) there's no long stop date on this agreement so he needs to stop hassling me as I can take my sweet time on all this, and I've got 9 years to go before the end of my mortgage term (ie I could kick the can down the road)

I've contacted the solicitors who did this job who first said 'we wouldn't have touched a loan agreement or the Land Reg with a bargepole as that would have been a clear conflict and not in your interests' and when I went back said but you did, you put me on the Land Reg with it, they are now stonewalling (file's shredded, people have left etc).  I've gone back to the Land Reg with more questions.  I've finally found most of the old emails on my exchange server and I can see that I did repeatedly complain that no one was telling me anything and I was not happy with this process and everyone just ignored me (and then I fell off my perch with illness)

My solicitor is now saying he's at the limit of his experience and I might have to suck it up and do a deal.  Other option is instruct counsel, but that will cost a great deal, which given sums involved might not be wise.  Plus in his experience with conflicts like this, the other side is a bully and an idiot, and he's going to continue being a pillock to run up my legal bill, plus counsel might say 'a deal is a deal, you're going to have to pay something'.

Sorry for War and Peace.  I'm just hoping there might be someone here who is up on the law and can advise me of my next move.  All I've had back from other side is 'glad your lying client agrees she owes me 8 grand, pay up asap'.  I'm so stressed about all this, it's keeping me awake at night.

Can anyone help me on next steps to untangle all this?  Do I just pay £8k and make it go away (plus conveyancing costs, plus setting up Ltd Co to 'own' the freehold).  I genuinely believe this man was deliberately dishonest, and I've been stitched up, but not sure there's a legal remedy?

Thanks

Girlscout

eddddy

Based on what you've said, I think the key facts are...

• 1) You and your neighbour agreed the buy the freehold of the building using "Collective Enfranchisement" (You must have signed some documents relating to this.)

• 2) You own a 1% share of the freehold - you paid £2,400 plus £2,300 costs (total £4,800) for that 1% share

• 3) Instead of paying £4,800 - you borrowed it from your neighbour, and signed a loan agreement to that effect

• 4) Because of the interest rate specified in that loan agreement, your neighbour says you now owe them £24,000

• 5) At some point, your neighbour's lease was extended to 999 years (As joint freeholder, you must have signed some documents relating to this.)

Firstly, do you agree that you signed documents relating to points 1 and 5? Or are you suggesting that your neighbour forged your signature (which would be a very serious criminal offence)?




I think that more generally, it seems that your arguments are that...

• You trusted your neighbour to be fair

• Your neighbour misled you. (Do you have any letters \ emails \ documents from your neighbour containing misleading statements?)

• You signed documents without fully understanding the implications - possibly because of your mental state at the time

• The terms of the agreements are so bad (1% of a freehold for £4,800 and 5% compound interest on a loan), that nobody in a fit mental state at the time would have agreed to those terms 

Unfortunately, if that's the extent of your defence, it might be a difficult fight for you to win, if it ends up in court - which seems to be what your solicitors say as well.

And you could end up spending thousands on lawyers, and still lose in court.

Unless there is some key info you haven't mentioned, I'm tempted to think that trying to negotiate a deal is your best option.

GirlScout

Hi

Thanks for replying.  Not quite, but yes that's largely it. 

1. I agreed to go along with collective enfranchisement in name only on the condition that the solictior drew up a contract making plain I was helping my neighbour, as all I needed was an non absentee freeholder with the option to buy the freehold when I sell - this never materialised.  The doc I did sign is not drawn up by solicitor.  I signed the T&Cs for the solicitor to act but I have no paperwork relating to anything else so no idea if I signed anything, I have no emails (now I've found them all) from when the file passed from one office - jobbing solicitor trying to get her to settle a price - to another office and specialist solicitor doing the enfranchisement, I think I only signed the T&Cs.

2. I own currently a nominal 0.1% (my entire 50% of the freehold is worth £2,500) and costs were £2,300 - the agreement is for my whole share of the freehold.  I haven't paid anything yet.   But if I do pay, I will own 50%.

3. The agreement says he will extend his lease to 125 years, he in fact extended to 999 years, this was lodged with land reg at the same date as freehold transfer, I agree I must have signed something but don't remember and despite asking repeatedly I have been furnished with no paperwork (only way to force the paperwork is to send pre action letter forcing disclosure)

4. Land Reg docs are not signed by me but by the solicitor - I have a copy of the loan agreement sent by my neighbour to the solicitor which I assume empowered him to do this??  (aside, I'm furious this solicitor did not alert me or advise me that this was a terrible idea!).

5. It's not just a simple loan agreement, it's a kinda half @rsed 'contract' relating to the transfer to Land - ie it lays out an 'agreement to agree' to the transfer of the other 49.99% of my share, contracts about land must be a deed and it's not a deed and it's witnessed by my brother, it's also not really a loan agreement because it does not make plain the figures involved (so there's no mention of sums, hence all the argy bargy getting him to cough up the paperwork, the 24k was him trying to make me pay 49.99% of the total cost when his share cost £14k (short lease) and mine £2.5k (long lease) plus costs and it's taken months to even get a copy of the completion statement to refute this).  My lawyer is of the opinon a good barrister could probably bin the agreement as so terrible as not be binding, but by the time you've paid the barrister £3k, you'd still be left with the orignal £4.8k so swings and roundabouts?

6. I was definitely not well (my illness didn't make me mad or psychotic, just reckless and cavalier, hard to prove in terms of capacity) and I was not advised at any point to get independent advice.  Hence the remortgage conveyancing soliticitor saying she'd never seen anything so outrageous in 30 years of practice.  Had I been well no force on earth would have induced me to sign it, it's so very obviously a terrible deal.

7) Yes he misled me, and I have it in writing that he agreed to get the solicitor to draw up the agreement, it's just by the time the agreement materialised I wasn't myself at all - it is honestly back of a wet beermat type of agreement, laughable really.  I also think the solicitor let me down as we were jointly instructing them, and they did not act in my interests.

8) I've gone back to Land Reg to double check that my signature is not anything held by them relating to this - all the copies I have from them are not signed by me.  So I am on the land reg on the back of this dubious 'agreement' drawn up by my neighbour on Microsoft Word, sent to the solicitor (who was also working for me) and he then filled in the Land Reg forms.

Sorry for another essay, trying to be clear.

My ideal would be to bin the whole lot, I don't want the freehold, however I'm willing to accept Im in this mess and pay him what it cost, I'm balking at paying him interest and if I'm honest, I'm sick of his bullying and lies (he also carries out repairs etc on the building without checking with me, and I'm fairly certain he sends me hooky invoices so muggins here is paying the whole lot) - as soon as I've started asking questions he's gone from charm itself to the most horrible, abusive, nasty person, it's really stressful to deal with.

Thanks

nicmyles

You definitely should want the freehold, because if you don't have it, presumably he will and will therefore have more power to extract cash from you.

GirlScout

Thanks Nic

Yes he's a bully, so one upside of owning my share is I have more power to fight my corner, as it's one of those amazing coincidences always that the 'emergency' works he had to instruct benefit his flat and not mine!  The downside is I want a BTL remortgage and that cuts my lenders by 98%, unless I do some jiggerypokery with who 'owns' it on paper.

GS

silvercar

Owning a share of the freehold shouldn't stop you getting a BTL mortgage on the leasehold that is your flat. See a good broker.

GirlScout

Thanks, my current lender won't allow me to own it, it's in their T&Cs and because of my age that cuts down options too, I did have a pretty good broker and he told me that it has to be in a Ltd co.

On another matter, heard back from Land Reg but they cannot tell me if the documents that transferred the 0.1% freehold interest into my name (and thus solidified this 'agreement') have to be signed by me.  The copies I've already had from LR are not signed by me, but by the solicitor on the back of my neighbour sending him the hooky agreement.

Does anyone know if the Land Reg title transfer docs need to be signed by me in person?

No amount of googling or searching or asking seems to get me the answer.  It seems mad to me that this has been done on the back of documents I did not sign.