Land Registry Issue Scuppering House Sale

BarelySentientAI

Northernsoul123 said:

Thanks so much for your replies.
For clarification there is no mortgage attached to my property - it is owned outright.

Not your mortgage - the buyer's if they will take one.

Northernsoul123

Ah ok - I will ask my solicitor about this but it has not been mentioned as being a cause of their concern. 

To sum up the problem: It seems to be that the solicitors say that there isn't a problem at all, the buyer does understand there isn't really a problem but as a previous poster suggested they seem to be worried that if they re-sell a prospective buyer might think that there is. If that makes sense!

propertyrental

Sounds like they are not really committed, maybe looking for an excuse to pull out?

Flaky buyer. Give a (short) deadline to exchange and then re-market - If they are serious that might motivate them to act.

Northernsoul123

Thank you: I agree with you and this is exactly what I have decided to do.

mlz1413

If I were buying your house I'd want the titles merged so that the confusion of 2 titles is over.
I'd instructed your own solicitor to do this work.  

But also agree that buyer sounds flaky and you need to say you are getting the leases merged and if they don't exchange contracts you will re-market.

Good luck!

sheramber

mlz1413 said:

If I were buying your house I'd want the titles merged so that the confusion of 2 titles is over.
I'd instructed your own solicitor to do this work.  

But also agree that buyer sounds flaky and you need to say you are getting the leases merged and if they don't exchange contracts you will re-market.

Good luck!

From first post
They also said if I applied for a merge myself it may not be approved at all (as there is no "intent"?).

Land_Registry

RHemmings said:

Northernsoul123 said:

user1977 said:

Your solicitor’s advice is correct, contacting your MP because your buyer is being difficult would be absurd.

I know but I am desperate! 😅 Myself and the person I was wanting to buy from have been sat in our respective houses surrounded by boxes waiting for exchange of contracts for weeks now.

I was meaning to ask my MP to write to the Land Registry if they will not merge the titles as I was thinking this could stop me selling my house to anyone at all but as my solicitor has told me this does not seem to be the case anyway; it is just this particular buyer who is not happy.

Any other ideas you think might resolve this?

I'm surprised that nobody has paged: @Land_Registry here. They are an official representative of the Land Registry, and give a lot of very useful advice in this forum. 

Reading the thread as a whole, I agree that the buyer is being over-cautious. But, a house purchase is a huge major life event and a lot of many people's finances (and therefore future) are tied up in it. A lot of the concerns I have about 'something wrong' with a property are not because I'm worried myself (indemnity policies can be cheap, where applicable), but because I'm worried that future buyers may be put off. 

An application to merge a freehold and leasehold is in itself 'intent' - after all you are applying to determine the lease and merge it back into the freehold so the leasehold title/tenure is closed and the reference to it is removed from the freehold title. See section 3 of PG 26 - Practice guide 26: leases – determination - GOV.UK (www.gov.uk)
The situation where someone buys both leasehold and then freehold is not unusual but merger/determination only then happens if applied for. Your DIY conveyancing and not requesting merger could be blamed but to be honest plenty of conveyancers don't request merger when it might be something to consider.
Main reason for not wanting to merge is that the lease includes rights that would be lost if the lease came to an end
Main reason for not being able to merge, which is very different, is that the two titles are not in the same ownership or held in the same capacity, one is mortgaged (usually the leasehold) but the other isn't or there are incumbrances on the leasehold title that haven't been cleared for example debts, court orders, trusts etc
What's perhaps also not unusual is that a buyer's conveyancer won't buy and then request merger - usually it's the buyer's new mortgage that says 'No' as it can't be approved for a freehold/leasehold scenario. Whilst it could be the conveyancer being 'unreasonable' that reads as if it's more likely to be one conveyancer's view, acting for the seller it's then not their issue to worry about if the sale completes. The primary risks are those of the buyer/their lender so wanting a clear cut purchase with no additional issues/titles may not be unreasonable but only they can decide and that's their choice.
I don;t think indemnity policies play a part here as the 'risk' doesn't really exist re having one freehold or one freehold and one leasehold. You still own the property with one or both titles and you can still sell with one or both. 
So I would suggest looking at PG 26 section 3 and checking the two registered titles. If merger is possible as explained then apply for it using form AP1 and pay a £40 fee. If you have a confirmed purchase request expedition after you have applied. Request an expedite - GOV.UK (www.gov.uk)
NB - I suspect, but obviously don;t know, that where the conveyancer suggests we might refuse merger that they maybe mixing that up with amalgamation. Merger is as described above. Amalgamation is where you apply to combine two or more titles into one so for example a main property with a bit of extra land at the side. Separately registered as freehold titles as one was bought after the other. We tend to refuse such requests as it's not necessary. But mergers, where you are determining a leasehold title, are invariably necessary if applied for 

Northernsoul123

Land_Registry said:

RHemmings said:

Northernsoul123 said:

user1977 said:

Your solicitor’s advice is correct, contacting your MP because your buyer is being difficult would be absurd.

I know but I am desperate! 😅 Myself and the person I was wanting to buy from have been sat in our respective houses surrounded by boxes waiting for exchange of contracts for weeks now.

I was meaning to ask my MP to write to the Land Registry if they will not merge the titles as I was thinking this could stop me selling my house to anyone at all but as my solicitor has told me this does not seem to be the case anyway; it is just this particular buyer who is not happy.

Any other ideas you think might resolve this?

I'm surprised that nobody has paged: @Land_Registry here. They are an official representative of the Land Registry, and give a lot of very useful advice in this forum. 

Reading the thread as a whole, I agree that the buyer is being over-cautious. But, a house purchase is a huge major life event and a lot of many people's finances (and therefore future) are tied up in it. A lot of the concerns I have about 'something wrong' with a property are not because I'm worried myself (indemnity policies can be cheap, where applicable), but because I'm worried that future buyers may be put off. 

An application to merge a freehold and leasehold is in itself 'intent' - after all you are applying to determine the lease and merge it back into the freehold so the leasehold title/tenure is closed and the reference to it is removed from the freehold title. See section 3 of PG 26 - Practice guide 26: leases – determination - GOV.UK (www.gov.uk)
The situation where someone buys both leasehold and then freehold is not unusual but merger/determination only then happens if applied for. Your DIY conveyancing and not requesting merger could be blamed but to be honest plenty of conveyancers don't request merger when it might be something to consider.
Main reason for not wanting to merge is that the lease includes rights that would be lost if the lease came to an end
Main reason for not being able to merge, which is very different, is that the two titles are not in the same ownership or held in the same capacity, one is mortgaged (usually the leasehold) but the other isn't or there are incumbrances on the leasehold title that haven't been cleared for example debts, court orders, trusts etc
What's perhaps also not unusual is that a buyer's conveyancer won't buy and then request merger - usually it's the buyer's new mortgage that says 'No' as it can't be approved for a freehold/leasehold scenario. Whilst it could be the conveyancer being 'unreasonable' that reads as if it's more likely to be one conveyancer's view, acting for the seller it's then not their issue to worry about if the sale completes. The primary risks are those of the buyer/their lender so wanting a clear cut purchase with no additional issues/titles may not be unreasonable but only they can decide and that's their choice.
I don;t think indemnity policies play a part here as the 'risk' doesn't really exist re having one freehold or one freehold and one leasehold. You still own the property with one or both titles and you can still sell with one or both. 
So I would suggest looking at PG 26 section 3 and checking the two registered titles. If merger is possible as explained then apply for it using form AP1 and pay a £40 fee. If you have a confirmed purchase request expedition after you have applied. Request an expedite - GOV.UK (www.gov.uk)
NB - I suspect, but obviously don;t know, that where the conveyancer suggests we might refuse merger that they maybe mixing that up with amalgamation. Merger is as described above. Amalgamation is where you apply to combine two or more titles into one so for example a main property with a bit of extra land at the side. Separately registered as freehold titles as one was bought after the other. We tend to refuse such requests as it's not necessary. But mergers, where you are determining a leasehold title, are invariably necessary if applied for 

Thank you so much for this. I think it may be too late unfortunately as I have now given my buyer an ultimatum and said I will not merge the titles since my solicitor had told me I would not be likely to be able to do so. Do you know how long these merges tend to take as I may do this if the seller has pulled out before I remarket the house; I know my solicitor also indicated the timescale would be a problem.

annetheman

Northernsoul123 said:

I asked my solicitor if my house was therefore unsaleable and they said not at all; the issue was with the buyer who was being unreasonable.

This isn't the issue at all. The issue is that you did an amateur application to the Land Registry without considering the consequences, and your multiple Titles of different qualities are now causing problems with the sale.

I'm going to be very blunt, apologies in advance.

Blaming your buyer for rightly being unwilling to buy with a Title issue is arrogant -- also, foolish because mortgage lenders rely on solicitors acting on behalf of the buyer to ensure the Title of the property is GOOD and MARKETABLE and your useless leasehold Title is not good and not marketable at all. Only yourself to blame for that.

I am a current buyer waiting for my seller to sort a Title issue they could have sorted 24 years ago out. We would now be merging Absolute and Possessory Titles today, instead of faffing about with a TR1. This is application number 2 because their solicitors mucked up the first one by sending copies instead of originals for a first charge - rookie error) -- I absolutely understand why no one in their right mind will buy until YOU sort it out.

Throughout, my seller has been very fair, transparent, and had the humility to admit his own and his solicitor's own decisions have led us here.

For this reason, I am willing to wait - so long so that my mortgage offer is expiring in 3 weeks, I've now sold my own property and have broken the chain to move in with my dad waiting for this Title to be sorted. Because my seller is being very fair and showing willingness to sort this out.

If my seller had been like you, i.e. in complete denial of their own part to play in this, blaming me for their own Title delay and throwing around accusations that my diligence is "unreasonable" etc, I would not hung around (I'm their 2nd buyer, so maybe like you, they had to learn the hard way)!

Good luck.

Land_Registry

Northernsoul123 said:

Thank you so much for this. I think it may be too late unfortunately as I have now given my buyer an ultimatum and said I will not merge the titles since my solicitor had told me I would not be likely to be able to do so. Do you know how long these merges tend to take as I may do this if the seller has pulled out before I remarket the house; I know my solicitor also indicated the timescale would be a problem.

You can request expedition to reduce the wait time re such an application, once it's been made. Expedition gets it to the processing start line sooner but everything then hinges on it being in order of course.

As an aside and to offer some solace alongside annetheman's by own admission, blunt post, I think it is fair to say that such buyer decisions are indeed often for their lender, conveyancer and then themselves to make, and in that order of importance. 
Not having a pop at the post but simply trying to offer a little more to the discussion as there appears to be a path through this if someone decides to take it
I would suggest that your leasehold title is far from useless. Many properties are freehold/leasehold and the vast majority are sold/bought/mortgaged without any issues. The sticking points tend to occur if the lease has too few years left to run or, and more likely, the buyer's lender's mortgage product isn't a 'fit' for that specific mixed tenure/title purchase/secured loan. 
Leases are often not merged or determined simply because they include certain rights and more that would be lost to the property owner if their lease was ended. That's another reason why the leasehold is not useless although annetheman is right to draw attention to the points made
Their own scenario re Absolute/Possessory titles is though an amalgamation and not a merger and the latter can usually be upgraded after 12 years and then amalgamated with the absolute title in most cases. 
IN my experience it's rarely the actual seller/buyer that stands in the ay here but quite rightly they rely on their legal reps to navigate through the issues that arise. OP has two conveyancers who are coming at the issue from different directions, with different 'risk' appreciations. But as with all sales/purchases everything is negotiable and if one says No then the other should be trying to perhaps find another way to remove that obstacle to enable matters to then complete. If the merger is legit and possible then little point arguing the point as a professional and just apply, get the lease determined and move on, literally.