Buying a flat with a missing lease

ccctttty

Hi everyone and thanks in advance for any guidance.

My partner and I are first time buyers. We made an offer on an ex-council flat that was accepted back in October 2024. We've been making slow but steady progress on the sale since then (slow mainly due to waiting for the chain to complete).

Now it has come to light that the lease is missing. Our sellers don't have a copy and the council don't have a copy. Our solicitor has advised that we could proceed with an indemnity policy only if the council can confirm that all leases are granted on similar terms and if the mortgage lender is ok to proceed on that basis. Otherwise a new lease will need to be drawn up which will obviously take more money and time.

Our priority is to complete asap to avoid the hike in stamp duty rates after March and because the lease on our rental flat is ending and we would have to give notice soon. Now with this hurdle we are thinking of pulling out. We know that if we pull out, we won't be able to make another purchase in time, but we could stay in our rental flat another year which would give us more time to save up for stamp duty costs etc. But we also love this flat and of course have now sunk £££ into survey and solicitors fees.

Does anyone have advice about purchasing a leasehold with a missing lease? Is it going to be a huge headache down the line? Do councils normally grant leases on similar terms and do mortgage lenders normally approve this? Should we bite the bullet and ask for a new lease to be drawn up instead? Or pull out entirely? We are completely lost and frankly this entire process has been hugely stressful! 

Bobbityboo

When you say ‘leases are granted on similar terms’ similar terms to what?  Did the council check the rest of the block to see if they have leases for them? Can the person you are buying from ask any of their neighbours if they have theirs?  I’m not an expert, but have lived in a flat and know the lease is important. I would be wary about not seeing any lease at all. I’m not sure how risky it would.  Sure someone more knowledgeable will be along shortly!  

ccctttty

Bobbityboo said:

When you say ‘leases are granted on similar terms’ similar terms to what?  Did the council check the rest of the block to see if they have leases for them? Can the person you are buying from ask any of their neighbours if they have theirs?  I’m not an expert, but have lived in a flat and know the lease is important. I would be wary about not seeing any lease at all. I’m not sure how risky it would.  Sure someone more knowledgeable will be along shortly!  

Sorry, it's a flat in a big block so we're looking for confirmation that all leases for the block are granted on similar terms, in which case we could provide a copy of a neighbouring lease (which our sellers do have).

bouicca21

I assume you have checked land registry for a copy?

In a similar situation I (or rather my solicitor) obtained a quote for the cost of surrender and regrant, the vendors then agreed to pay for this by way of an allowance.  It was very straightforward.  But, and it is a big but, I was a cash buyer.  I have no idea whether this arrangement would have been acceptable to a mortgage lender.

ccctttty

bouicca21 said:

I assume you have checked land registry for a copy?

In a similar situation I (or rather my solicitor) obtained a quote for the cost of surrender and regrant, the vendors then agreed to pay for this by way of an allowance.  It was very straightforward.  But, and it is a big but, I was a cash buyer.  I have no idea whether this arrangement would have been acceptable to a mortgage lender.

Yes, the Land Registry doesn't hold a copy either...

Thanks, that would be an acceptable solution for us, if the mortgage lender would allow it. We would be planning to extend the lease in a couple of years anyway. Was there a reason you opted for an allowance rather than just knocking some ££ off the purchase price?

bouicca21

I just followed the solicitor’s advice.

NameUnavailable

You're not buying the flat, you're buying the lease. Are you comfortable spending all that money on something that they don't have?

I don't see why the freeholder can't issue a 'copy' given that it's a flat in a block of similar flats.

Mildreds_Earrings

If its a flat in a block and the Council have already sold other flats in the block, they should be able to provide a copy of a lease of one of the other flats (names redacted due to GDPR), to your Solicitor, so that you know and understand the terms of the lease. The lease will be assigned to you from the date of the first lease in the block anyway. Your Solicitor will then deal with it and advise you accordingly. 

youth_leader

I've been helping my 87 year old aunt extend her lease, she'd allowed it to drop to 74 years.

How many years are left on this lease, has the seller said?

saajan_12

Lets start with the risks of buying without seeing the lease..
1.  What if the council say that the lease is actually 50 years left not 100? 
2.  What if  the council say that the ground rent is actually £400 not £200?
3.  What if the council say in the past the leaseholder failed to pay and we repossessed the lease, and we didn't notice they moved back in. 
4.  What if the council say there was actually a restriction that you can't do xyz in the property (eg let it / have pets / renovate etc) which you've done and now must put back.
5.  etc.

Now how might an indemnity help.. no idea what it would say exactly, but at a guess it could be something like  <<On the basis that we have a copy of the Flat 2 lease and OP conforms to that lease as if it referred to Flat 1, and that OP remedies any breaches immediately once notified, then we will indemify the OP or a lender against any costs arising from the Flat 1 lease being found and different to Flat 2>>

1 -> perhaps the indemnity could cover the cost of extending the lease, but it could delay any sale for months or years. 
2 -> the indemnity might cover the difference in ground rent, and hopefully this is sorted by legislation soon anyway. For the lender, it might cover the value of the flat if its repossessed due to under payment of ground rent. 
3 -> uh....
4-> the indemnity might cover the cost of reverting any building work you did, or any penalties for unauthorised pets or tenants etc. However thereafter you might have to live with no pet etc, which may or may not be desirable. 
For the lender, it might 

Basically it heavily depends on what the indemnity says and what the other flat leases say. Only think about proceeding if you can live with that risk.