Freehold house with leasehold driveway: what could go wrong?

ztkr

I've recently viewed a house to buy. It's one of a block of 4 new build houses, each with their own freehold, but there is a shared driveway which is leasehold (999 years) and for which the freeholder is a major land/estates owner in the area. I'm aware of the pitfalls of leaseholds in general but what sort of thing can go wrong in this particular situation? For example, could the driveway freeholder do anything to limit access or change the terms in the future (I will of course read the lease). Another scenario I can think of: what would happen if one driveway leaseholder didn't pay their ground rent - could the freeholder restrict access to their property (this seems impractical) or do anything that would impact all the property owners? 

Thank you in advance for any response. I'm not enthusiastic about any kind of leasehold. Please take it as read that I would be checking any lease very carefully and discussing thoroughly with my conveyancer if I decided to buy.

user1977

The lease is the lease, it can't be unilaterally changed by any party.

If it's a 999 year term is there actually any ground rent payable?

ztkr

user1977 said:

The lease is the lease, it can't be unilaterally changed by any party.

If it's a 999 year term is there actually any ground rent payable?

Uncomfirmed so far but I'd expect it. Otherwise, I can't see what benefit the freeholder would have in retaining an interest.

david29dpo

You need to know the details of the lease.
Our shared drive is still owned by the builder (freehold) but we all have the correct rights over it so its worthless to the builder.
Never had a problem in 30 years.

user1977

ztkr said:

user1977 said:

The lease is the lease, it can't be unilaterally changed by any party.

If it's a 999 year term is there actually any ground rent payable?

Uncomfirmed so far but I'd expect it. Otherwise, I can't see what benefit the freeholder would have in retaining an interest.

There's unlikely to be much, if anything, in it for them in having it leasehold rather than freehold - arguably freehold can be worse from your point of view (see all the "fleecehold" issues with communal areas on estates). Leasehold is just a clunky way of getting around some quirks with how English property law works.

eddddy

ztkr said:

I've recently viewed a house to buy. It's one of a block of 4 new build houses, each with their own freehold, but there is a shared driveway which is leasehold (999 years) and for which the freeholder is a major land/estates owner in the area. I'm aware of the pitfalls of leaseholds in general but what sort of thing can go wrong in this particular situation? For example, could the driveway freeholder do anything to limit access or change the terms in the future (I will of course read the lease). Another scenario I can think of: what would happen if one driveway leaseholder didn't pay their ground rent - could the freeholder restrict access to their property (this seems impractical) or do anything that would impact all the property owners? 

You mention "if one driveway leaseholder didn't pay their ground rent".

Can you clarify the ownership structure? (i.e. what do you mean by "one driveway leaseholder")

You're saying

• There is a shared driveway
• A major landowner owns the freehold of the drive

And are you saying that:

• Each homeowner owns the leasehold of one section of drive? (i.e. the drive is divided into 4 sections)
• or The 4 homeowners jointly own the leasehold of the drive?
• or A management company or developer owns the leasehold of the shared drive?

And who is responsible for maintaining the shared drive?


(If a management company or developer owns the leasehold, presumably they maintain the drive, so you will pay them a service charge, so there could be a potential 'fleecehold' situation.)

ztkr

user1977 said:

ztkr said:

user1977 said:

The lease is the lease, it can't be unilaterally changed by any party.

If it's a 999 year term is there actually any ground rent payable?

Uncomfirmed so far but I'd expect it. Otherwise, I can't see what benefit the freeholder would have in retaining an interest.

There's unlikely to be much, if anything, in it for them in having it leasehold rather than freehold - arguably freehold can be worse from your point of view (see all the "fleecehold" issues with communal areas on estates). Leasehold is just a clunky way of getting around some quirks with how English property law works.

Thank you, one of my concerns is there will be service charges, management charges etc. for managing the driveway.

ztkr

eddddy said:

ztkr said:

I've recently viewed a house to buy. It's one of a block of 4 new build houses, each with their own freehold, but there is a shared driveway which is leasehold (999 years) and for which the freeholder is a major land/estates owner in the area. I'm aware of the pitfalls of leaseholds in general but what sort of thing can go wrong in this particular situation? For example, could the driveway freeholder do anything to limit access or change the terms in the future (I will of course read the lease). Another scenario I can think of: what would happen if one driveway leaseholder didn't pay their ground rent - could the freeholder restrict access to their property (this seems impractical) or do anything that would impact all the property owners? 

You mention "if one driveway leaseholder didn't pay their ground rent".

Can you clarify the ownership structure? (i.e. what do you mean by "one driveway leaseholder")

You're saying

• There is a shared driveway
• A major landowner owns the freehold of the drive

And are you saying that:

• Each homeowner owns the leasehold of one section of drive? (i.e. the drive is divided into 4 sections)
• or The 4 homeowners jointly own the leasehold of the drive?
• or A management company or developer owns the leasehold of the shared drive?

And who is responsible for maintaining the shared drive?


(If a management company or developer owns the leasehold, presumably they maintain the drive, so you will pay them a service charge, so there could be a potential 'fleecehold' situation.)

Thank you. All 4 homeowners would be leaseholders of the driveway. The driveway is not divided into 4 sections; all homeowners need to use the driveway to access their properties. The freehold of the driveway is owned by an estates management company. Maintenance would be down to the freeholder, the estates management company, so there's likely to be a service charge for managing the driveway.

My question was about how the freeholder could recover ground rent or service charge if one leaseholder didn't pay (unlike with, say, a leasehold flat, they can't reclaim the driveway) and I was wondering how such a situation might impact the other leaseholders.

user1977

ztkr said:

user1977 said:

ztkr said:

user1977 said:

The lease is the lease, it can't be unilaterally changed by any party.

If it's a 999 year term is there actually any ground rent payable?

Uncomfirmed so far but I'd expect it. Otherwise, I can't see what benefit the freeholder would have in retaining an interest.

There's unlikely to be much, if anything, in it for them in having it leasehold rather than freehold - arguably freehold can be worse from your point of view (see all the "fleecehold" issues with communal areas on estates). Leasehold is just a clunky way of getting around some quirks with how English property law works.

Thank you, one of my concerns is there will be service charges, management charges etc. for managing the driveway.

Well, yes, no matter what the type of tenure is or how it's managed, it's a piece of shared land which will need maintained at joint expense at some point.

ExEstateAgent

I doubt a lease will be shared between 4 freehold houses. I think this will be much like any modern estate with unadopted roads. You have right of way etc. but will have to pay for upkeep of the road and any street lighting etc. Your solicitor should be able to confirm exactly what the position is.