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    • BluecoatRob
    • By BluecoatRob 9th Oct 19, 8:28 PM
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    BluecoatRob
    My purchase is on the verge of collapse - can anyone help me understand why?
    • #1
    • 9th Oct 19, 8:28 PM
    My purchase is on the verge of collapse - can anyone help me understand why? 9th Oct 19 at 8:28 PM
    RE: My purchase is on the verge of collapse - can anyone help me understand why?

    Hello

    My partner and I are 6-months into conveyancing for our first house purchase. Our solicitors have hit an impasse over a problem with the lease, and I'm struggling to understand the situation and whether it is salvageable. This is where I think we are:

    - Our solicitor flagged a problem with the leasehold relating to an accidental surrender and regrant. It appears a deed of variation was submitted several years ago to increase the duration of the lease, but when this was presented to the land registry the old lease was surrendered and replaced with the deed. This seems to be because the deed was incorrectly worded. The old lease terms did not carry over and therefore the property has no adequate lease, which may be a problem for our mortgage lender.

    - Our solicitors raised the issue with the other side several weeks ago, but regrettably they have been unable to resolve the issue with the land registry and have decided not to pursue it any further. I understand there has been some back and forth between the vendor's solicitor and the land registry, with neither willing to accept the responsibility for resolving the issue. It's now back with my solicitors.

    Can anyone help me understand - what could the vendor and their solicitor do to resolve the issue with the land registry, and why might they be unable/unwilling to resolve it? And what options do we have as the buyers?

    All opinions welcome - thanks in advance.
Page 1
    • kimplus8
    • By kimplus8 9th Oct 19, 8:46 PM
    • 849 Posts
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    kimplus8
    • #2
    • 9th Oct 19, 8:46 PM
    • #2
    • 9th Oct 19, 8:46 PM
    if the vendors are unwilling to resolve the issue of the property not having a suitable lease then personally I would be running a mile in the other direction.
    They will be hard pressed to sell without a suitable lease so it is in their interests to sort this, however, as to what you can do as buyers..... if you really want this property then you can keep trying to get them to sort is as it is current their problem to sort.
    Mum to 8 troopersDave Ramsey and Martin Lewis are my Money Saving Heros.
    • bouicca21
    • By bouicca21 9th Oct 19, 8:54 PM
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    bouicca21
    • #3
    • 9th Oct 19, 8:54 PM
    • #3
    • 9th Oct 19, 8:54 PM
    I think itís a bit odd that the original lease terms do not continue. Mine did. But if the flat has no viable lease then it isnít mortgageable and the vendors need to sort it out.

    It is probably best to walk, but if you want to buy the place then you could ask your solicitor if the mortgage company would be satisfied with a legally binding assurance that a new lease will be issued (with no new onerous terms) and that all the legal fees will be put as an allowance against the purchase price. This would mean getting the vendor and the freeholder to agree to such an agreement.
    • AdrianC
    • By AdrianC 10th Oct 19, 7:44 AM
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    AdrianC
    • #4
    • 10th Oct 19, 7:44 AM
    • #4
    • 10th Oct 19, 7:44 AM
    - Our solicitor flagged a problem with the leasehold relating to an accidental surrender and regrant. It appears a deed of variation was submitted several years ago to increase the duration of the lease, but when this was presented to the land registry the old lease was surrendered and replaced with the deed. This seems to be because the deed was incorrectly worded. The old lease terms did not carry over and therefore the property has no adequate lease, which may be a problem for our mortgage lender.
    Originally posted by BluecoatRob
    I suspect "may be" is an understatement.

    - Our solicitors raised the issue with the other side several weeks ago, but regrettably they have been unable to resolve the issue with the land registry and have decided not to pursue it any further. I understand there has been some back and forth between the vendor's solicitor and the land registry, with neither willing to accept the responsibility for resolving the issue. It's now back with my solicitors.

    Can anyone help me understand - what could the vendor and their solicitor do to resolve the issue with the land registry, and why might they be unable/unwilling to resolve it?
    The one person you've not mentioned is the only person that can get this resolved. The freeholder. Remember, the lease is granted BY the freeholder TO the leaseholder. The LR merely record it. The easiest and quickest and best resolution is for the freeholder to grant a new lease to the leaseholder, which LR then replace the existing iffy one with.

    And what options do we have as the buyers?
    You have a grand total of two...
    1. Walk.
    2. Wait.

    There may, dependent on your lender, be a third.
    3. Buy, then resolve.

    But I wouldn't even consider it.
    • BluecoatRob
    • By BluecoatRob 10th Oct 19, 7:55 AM
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    BluecoatRob
    • #5
    • 10th Oct 19, 7:55 AM
    • #5
    • 10th Oct 19, 7:55 AM
    Hello all, and thank you for your replies, they are much what I expected. It really is on the vendors to sort this out and our only option if we want to continue is to keep pestering them to fix it. I'm still a little confused as to why they haven't sorted it - I have a hunch that they used the same solicitor to sort sort the deed, so perhaps they are unwilling to own the mistake.

    Oh well - looks like it's back to the drawing board!

    I think itís a bit odd that the original lease terms do not continue. Mine did. But if the flat has no viable lease then it isnít mortgageable and the vendors need to sort it out.
    There was some incorrect wording in the deed causing the original lease to be surrendered automatically. The vendor's solicitor has been arguing the toss with the land registry saying it shouldn't have happened, but it has so...

    The one person you've not mentioned is the only person that can get this resolved. The freeholder. Remember, the lease is granted BY the freeholder TO the leaseholder. The LR merely record it. The easiest and quickest and best resolution is for the freeholder to grant a new lease to the leaseholder, which LR then replace the existing iffy one with.
    The freehold is actually held in a Ltd company made up of the residents of the block, and the purchase includes buying the vendors share of the freehold. So if what you say is true they could get in touch with the other residents and sort a new lease. I expect that would cost them something, which may explain why they haven't just done that.
    • AdrianC
    • By AdrianC 10th Oct 19, 8:05 AM
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    AdrianC
    • #6
    • 10th Oct 19, 8:05 AM
    • #6
    • 10th Oct 19, 8:05 AM
    The freehold is actually held in a Ltd company made up of the residents of the block, and the purchase includes buying the vendors share of the freehold. So if what you say is true they could get in touch with the other residents and sort a new lease. I expect that would cost them something, which may explain why they haven't just done that.
    Originally posted by BluecoatRob
    It'll cost 'em less than losing the sale to you and then finding nobody else wants this pig in this poke either...

    Remember, there's two hats being worn/sold.

    1. Leaseholder.
    2. Share in freeholder company.

    The freeholder company needs to make that decision, probably via a shareholder vote. The vendor (wearing shareholder hat) has one of however many votes.

    Is this the only lease in the block affected?
    • eddddy
    • By eddddy 10th Oct 19, 8:52 AM
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    eddddy
    • #7
    • 10th Oct 19, 8:52 AM
    • #7
    • 10th Oct 19, 8:52 AM
    The freehold is actually held in a Ltd company made up of the residents of the block, and the purchase includes buying the vendors share of the freehold. So if what you say is true they could get in touch with the other residents and sort a new lease.
    Originally posted by BluecoatRob
    This may be a big part of the problem.

    The seller has to persuade a bunch of his neighbours to show an interest, sign some legal documents etc.

    There's no benefit to the neighbours, they might not really understand why they need to sign them - and often human nature is "I don't understand, so I'm not going to get involved".


    Unless all their leases were messed-up in the same way - that might give the neighbours an incentive (if they understand the problem).

    But even if everyone's lease is messed-up, the neighbours' first argument might be with their solicitor for causing the mess - i.e. a long drawn out dispute over who should pay for the new leases to be created.
    • GDB2222
    • By GDB2222 10th Oct 19, 8:52 AM
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    GDB2222
    • #8
    • 10th Oct 19, 8:52 AM
    • #8
    • 10th Oct 19, 8:52 AM
    Presumably, none of the other freeholders realise the lease is defective, and the present owners can go on living there indefinitely. Raising this issue would be a definite risk, so they may just decide to keep quiet.
    No reliance should be placed on the above! Absolutely none, do you hear?
    • Soundgirlrocks
    • By Soundgirlrocks 10th Oct 19, 10:53 AM
    • 672 Posts
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    Soundgirlrocks
    • #9
    • 10th Oct 19, 10:53 AM
    • #9
    • 10th Oct 19, 10:53 AM
    This may be a big part of the problem.

    The seller has to persuade a bunch of his neighbours to show an interest, sign some legal documents etc.

    There's no benefit to the neighbours, they might not really understand why they need to sign them - and often human nature is "I don't understand, so I'm not going to get involved".


    Unless all their leases were messed-up in the same way - that might give the neighbours an incentive (if they understand the problem).
    Originally posted by eddddy
    +1 for this, it took me 6 years to get the leases in our block amended and extended because 1 leaseholder didn't understand and didn't want the hassle.
    • BluecoatRob
    • By BluecoatRob 10th Oct 19, 12:06 PM
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    BluecoatRob
    This may be a big part of the problem.

    The seller has to persuade a bunch of his neighbours to show an interest, sign some legal documents etc.

    There's no benefit to the neighbours, they might not really understand why they need to sign them - and often human nature is "I don't understand, so I'm not going to get involved".


    Unless all their leases were messed-up in the same way - that might give the neighbours an incentive (if they understand the problem).

    But even if everyone's lease is messed-up, the neighbours' first argument might be with their solicitor for causing the mess - i.e. a long drawn out dispute over who should pay for the new leases to be created.
    That's interesting, and I can see how that would play out. To add to the difficulty the vendor is now living out of the country, so it's not like they can go round and knock on doors.

    From the estate agent I gather it is only this one lease that is screwed up, and part of the argument between the vendor and the land registry is how just this one lease got screwed up and the others didn't. I'm not entirely sure if they were all extended at the same time, but if so it is a little odd that only one would be effected. Then again, there are several odd typos in the leases, for example one of the flats is listed twice and one not at all. Someone somewhere made a boo boo on the paperwork, either at the solicitors who wrote the deed or the land registry, and I guess until either is willing to accept responsibility for the mistake it won't get fixed.

    Out of curiosity, how much would it cost for the vendor/freeholder to issue a new lease with the land registry? And who would the cost fall on?
    • bouicca21
    • By bouicca21 10th Oct 19, 3:27 PM
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    bouicca21
    You would be expecting the vendor to pay all the fees - his/hers, the freeholderís, yours. Some 5 years ago my vendor stumped up £3k to correct a defective lease.
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