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Freehold on completion - solicitor processing as a leasehold?

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jamieRH20
jamieRH20 Posts: 5 Forumite
in House buying, renting & selling
Hi all,

Me and my partner are buying a freehold on completion property. The current owners are buying the freehold of the property through completion and getting the funds for the freehold purchase from the sale of the house.

My question is: should our solicitor process our conveyancing for the house as a leasehold or a house as freehold on completion? Really would like any help/guidance on this as I know soliciting prices can differ by a few hundred if it’s getting processed as a leasehold. Our estate agents have said it should be processed as freehold as the sellers have paperwork etc which will eventually go to our solicitor which demonstrates the freehold is being purchased.

Thanks in advance for any advice :j
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  • davidmcn
    davidmcn Posts: 23,596 Forumite
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    If the leasehold is being extinguished on completion then effectively you're buying a freehold. It is however more work than simply buying a freehold. Have you got any fee quotes yet?
  • AdrianC
    AdrianC Posts: 42,189 Forumite
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    It IS a leasehold, and it will still be a leasehold after completion.

    The only difference is that, as well as buying the leasehold house from one person, you're also buying the freehold from somebody else.


    Once you own both leasehold and freehold, you can choose to extinguish the lease, so that the two things you own become one. But, until that happens, there are two things.


    So what happens if the freehold sale doesn't go through for whatever reason? You own a leasehold house. Only.
  • jamieRH20
    jamieRH20 Posts: 5 Forumite
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    We have been quoted for fees that are for a freehold house purchase for the soliciting fees, however our solicitor has also informed us that if the freehold isn’t purchased by the sellers before the contracts are drawn up, they have to process the soliciting as a leasehold. After finding this out I spoke to the estate agents who informed me that the freehold on completion method to gain the freehold is incredibly common and that our solicitor will receive paperwork soon to confirm the freehold can be purchased, and stated this should mean it’s processed as a freehold from a soliciting point of view... thanks for the reply by the way :)
  • jamieRH20
    jamieRH20 Posts: 5 Forumite
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    Thanks for the reply... I’ve been told by the estate agent that both the points you mentioned above will happen at the exact same time when the total monies is transferred over on completion. They stated that on completion, we will own the keys to the property and it’s leasehold.

    With your points in mind, does that mean our solicitor will process the house as a leasehold, costing us more money?? Thanks
  • jamieRH20
    jamieRH20 Posts: 5 Forumite
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    Key to the property and it’s **freehold**
  • anselld
    anselld Posts: 8,282 Forumite
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    jamieRH20 wrote: »
    Thanks for the reply... I’ve been told by the estate agent that both the points you mentioned above will happen at the exact same time when the total monies is transferred over on completion. They stated that on completion, we will own the keys to the property and it’s leasehold.

    With your points in mind, does that mean our solicitor will process the house as a leasehold, costing us more money?? Thanks

    Please do not listen to the Estate Agent (they are not your Agent).

    If you don't trust your Solicitor get another one.

    IANAL, but I would think the Lease cannot be extinguished until one party owns both the Lease and the Freehold. Given that the Freehold purchase is simultaneous with completion this would dictate it must be you (your Solicitor) to do that as the final step after completion.
  • G_M
    G_M Posts: 51,977 Forumite
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    If anyone in the process is 'soliciting' I would seriously question whether you should be paying them at all.....
  • jamieRH20
    jamieRH20 Posts: 5 Forumite
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    Ok thanks for the replies... so just to clarify... should my solicitor be processing the sale as a leasehold property or freehold ?

    Thanks
  • eddddy
    eddddy Posts: 16,448 Forumite
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    AdrianC wrote: »
    So what happens if the freehold sale doesn't go through for whatever reason? You own a leasehold house. Only.

    The freehold and leasehold purchase transactions would be linked. The solicitor would not allow one contract to be exchanged without the other being exchanged at the same time.


    Just the same as when you sell and buy a house in a linked transaction. The solicitor would not allow the purchase contract to be exchanged without the sale contract being exchanged at the same time (or vice versa).
  • AdrianC
    AdrianC Posts: 42,189 Forumite
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    eddddy wrote: »
    The freehold and leasehold purchase transactions would be linked. The solicitor would not allow one contract to be exchanged without the other being exchanged at the same time.

    Just the same as when you sell and buy a house in a linked transaction. The solicitor would not allow the purchase contract to be exchanged without the sale contract being exchanged at the same time (or vice versa).
    Except that the vendor of the leasehold house has exchanged contracts, so is legally liable for any failure to complete.

    He cannot be held responsible for any failure of the freehold vendor - somebody else entirely - to complete... So if the leasehold house can complete, but the freehold can't...? What then?
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