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Leasehold Questions

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deFoix
deFoix Posts: 213 Forumite
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in House buying, renting & selling
Hi all,

1. I received a 'clean copy' of the lease from my solicitor last year and I noticed that there isn't my signature on it (or even a space for it). I don't recall ever signing any physical lease. Is this normal? In law by purchasing the Leasehold do you automatically agree to it's terms?

2. The 4 leaseholders in our block are currently buying the Freehold. Do we need to sign 4 new leases as Freeholders and Leaseholders or do the terms just 'transfer' over?

Yes I have asked my solicitor but they're obviously busy this time of year and not answering so hoping for some general help.
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  • eddddy
    eddddy Posts: 16,443 Forumite
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    When you bought the flat, the lease would have been assigned to you. You wouldn't have to sign it.

    You are bound by all the terms of the lease.

    It is unnecessary (and it would be unusual) to create new leases as a result of the leaseholders buying the freehold.

    The leases carry on as they are - there is nothing to 'transfer over'.

    But the freehold would be transfered to the new owners.
  • deFoix
    deFoix Posts: 213 Forumite
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    Thanks eddddy,

    But that would mean that the lease (contract) is made between two parties that are no longer present. Physically the lease would have the old freeholder's name and old leaseholder's name on the front of it.

    Is it therefore correct to call a lease a contract? Just trying to understand the mechanics of the law.
  • G_M
    G_M Posts: 51,977 Forumite
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    edited 7 December 2017 at 1:51PM
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    The lease was created by two people: the freeholder at that time nd the original (1st) leaseholder. They signed it.

    It is a lease that continues for 99 (or 999 whatever) years.

    During that time, the original freeholder may sell his freehold. The buyer (new freeholder) is bound by the lease attached to the freehol he has bought. His name is not added to the lease.

    Similarly, during that time, the original leaseholder may sell his lease, with however many years remain on it. The buyer (new leaseholder) is bound by the lease he has bought. His name is not added to the lease.

    At any one time, the actuall owners of the freehold and lease are recorded electonically (usually) by the Land Registry. If in doubt about ownership, check there.

    Think of the lease as an asset which can be bought and sold. When a 2nd hand car is sold, it is not re-manufactured back to its originl condition, and the original manufacturer is not party to the transaction.
  • eddddy
    eddddy Posts: 16,443 Forumite
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    Boler1985 wrote: »
    Is it therefore correct to call a lease a contract?

    A lease is essentially a contract. The terms are enforceable by law.

    (Although there is also a lot of legislation about leaseholds, which might override some terms of the lease, or add to them.)
  • deFoix
    deFoix Posts: 213 Forumite
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    Ok thanks so the lease is not really a contract but a kind of transferable agreement.
  • G_M
    G_M Posts: 51,977 Forumite
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    When first created, it is a contract been the original signatories (original freeholder and original lessee, who both sign).

    It is also an asset in its own right.

    When subsequently sold, a new contract is formed between the buyer and seller - that is the previous and subseqent leaseholders. Neither the original nor any subsequent freeholder is involved.

    The terms of that subsequent contract (which is signed by buyer and seller) are that ownership of the remaining lease will be transferred in exchange for money.
  • eddddy
    eddddy Posts: 16,443 Forumite
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    Boler1985 wrote: »
    Ok thanks so the lease is not really a contract but a kind of transferable agreement.

    I'm not really sure what point you're making.

    What difference are you implying between a 'contract' and an 'agreement'?


    lease (noun) : A contract by which one party conveys land, property, services, etc. to another for a specified time, usually in return for a periodic payment.
    https://en.oxforddictionaries.com/definition/lease

    contract (noun): A written or spoken agreement, especially one concerning employment, sales, or tenancy, that is intended to be enforceable by law.
    https://en.oxforddictionaries.com/definition/contract
  • deFoix
    deFoix Posts: 213 Forumite
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    Eddddy,

    My understanding is that a contract in English law has very specific meaning and requirements. There must be parties to a contract and there must be consideration. I don't believe contracts can simply be 'transferred' to 3rd parties in a way a lease is described to be above.


    G_M,

    I get that the lease is an asset in the sense that it gives the holder the right to quiet enjoyment etc. for the term but the lease also contains agreements of what can/cannot be done by both parties (freeholder, leaseholder). What I don't understand is by what legal mechanism these 'rights' and 'agreements', are transferred between the old and new leaseholder if a new agreement between the Freeholder is not signed. Maybe in some legislation?

    I accept that this is somewhat of a esoteric point but I just like to understand how it works.
  • davidmcn
    davidmcn Posts: 23,596 Forumite
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    Boler1985 wrote: »
    I don't believe contracts can simply be 'transferred' to 3rd parties
    Your belief is wrong. It is quite commonplace for contracts to be assigned to third parties.
  • eddddy
    eddddy Posts: 16,443 Forumite
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    Boler1985 wrote: »
    I don't believe contracts can simply be 'transferred' to 3rd parties in a way a lease is described to be above.

    Contracts can be assigned - and leases can be assigned.

    When somebody says they have sold their flat, they could say instead that they've assigned the lease to somebody else.
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