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  • FIRST POST
    • jamieRH20
    • By jamieRH20 10th Nov 18, 6:58 PM
    • 5Posts
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    jamieRH20
    Freehold on completion - solicitor processing as a leasehold?
    • #1
    • 10th Nov 18, 6:58 PM
    Freehold on completion - solicitor processing as a leasehold? 10th Nov 18 at 6:58 PM
    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 itís 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
Page 1
    • davidmcn
    • By davidmcn 10th Nov 18, 7:03 PM
    • 9,076 Posts
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    davidmcn
    • #2
    • 10th Nov 18, 7:03 PM
    • #2
    • 10th Nov 18, 7:03 PM
    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
    • By AdrianC 10th Nov 18, 7:07 PM
    • 19,111 Posts
    • 17,515 Thanks
    AdrianC
    • #3
    • 10th Nov 18, 7:07 PM
    • #3
    • 10th Nov 18, 7:07 PM
    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
    • By jamieRH20 10th Nov 18, 7:12 PM
    • 5 Posts
    • 1 Thanks
    jamieRH20
    • #4
    • 10th Nov 18, 7:12 PM
    • #4
    • 10th Nov 18, 7:12 PM
    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 isnít 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 itís processed as a freehold from a soliciting point of view... thanks for the reply by the way
    • jamieRH20
    • By jamieRH20 10th Nov 18, 7:16 PM
    • 5 Posts
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    jamieRH20
    • #5
    • 10th Nov 18, 7:16 PM
    • #5
    • 10th Nov 18, 7:16 PM
    Thanks for the reply... Iíve 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 itís leasehold.

    With your points in mind, does that mean our solicitor will process the house as a leasehold, costing us more money?? Thanks
    • jamieRH20
    • By jamieRH20 10th Nov 18, 7:26 PM
    • 5 Posts
    • 1 Thanks
    jamieRH20
    • #6
    • 10th Nov 18, 7:26 PM
    • #6
    • 10th Nov 18, 7:26 PM
    Key to the property and itís **freehold**
    • anselld
    • By anselld 10th Nov 18, 7:33 PM
    • 5,964 Posts
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    anselld
    • #7
    • 10th Nov 18, 7:33 PM
    • #7
    • 10th Nov 18, 7:33 PM
    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
    Originally posted by jamieRH20
    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
    • By G_M 11th Nov 18, 2:49 AM
    • 45,948 Posts
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    G_M
    • #8
    • 11th Nov 18, 2:49 AM
    • #8
    • 11th Nov 18, 2:49 AM
    If anyone in the process is 'soliciting' I would seriously question whether you should be paying them at all.....
    • jamieRH20
    • By jamieRH20 11th Nov 18, 7:44 AM
    • 5 Posts
    • 1 Thanks
    jamieRH20
    • #9
    • 11th Nov 18, 7:44 AM
    • #9
    • 11th Nov 18, 7:44 AM
    Ok thanks for the replies... so just to clarify... should my solicitor be processing the sale as a leasehold property or freehold ?

    Thanks
    • eddddy
    • By eddddy 11th Nov 18, 10:24 AM
    • 7,187 Posts
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    eddddy
    So what happens if the freehold sale doesn't go through for whatever reason? You own a leasehold house. Only.
    Originally posted by AdrianC
    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
    • By AdrianC 11th Nov 18, 10:30 AM
    • 19,111 Posts
    • 17,515 Thanks
    AdrianC
    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).
    Originally posted by eddddy
    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?
    • eddddy
    • By eddddy 11th Nov 18, 10:38 AM
    • 7,187 Posts
    • 7,134 Thanks
    eddddy
    Ok thanks for the replies... so just to clarify... should my solicitor be processing the sale as a leasehold property or freehold ?
    Originally posted by jamieRH20
    You're kind of asking the wrong question.

    Tell your solicitor what you want, and ask them for a quote for the fee, for doing everything you need.

    ... and probably ask a number of solicitors for quotes.


    This is a non-standard purchase. I wouldn't use an 'online conveyancer', or 'conveyancing warehouse' for this (i.e. probably not the type of conveyancer that an EA would recommend).

    I would use a property specialist, who is experienced in conveyancing and lease determination etc.
    • eddddy
    • By eddddy 11th Nov 18, 10:55 AM
    • 7,187 Posts
    • 7,134 Thanks
    eddddy
    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?
    Originally posted by AdrianC
    Again, you have the same options as when you are selling/buying in a linked transaction - and one of the parties (your buyer or your seller) is unable to complete.


    e.g. Freeholder refuses to complete on sale, so you refuse to complete on leasehold purchase.

    Leasehold seller sues you; you sue freeholder.

    Or you could complete on the leasehold and sue the freeholder for damages, etc
    • davidmcn
    • By davidmcn 11th Nov 18, 11:32 AM
    • 9,076 Posts
    • 9,671 Thanks
    davidmcn
    Ok thanks for the replies... so just to clarify... should my solicitor be processing the sale as a leasehold property or freehold ?
    Originally posted by jamieRH20
    It's neither a normal leasehold purchase nor a normal freehold purchase. They need to transfer both interests. There ought to be some saving in that they don't need to do full due diligence of the lease (as the contents of it and any ongoing breaches etc are irrelevant). But I wouldn't expect the fee to be significantly less than a normal leasehold transaction.

    So if the leasehold house can complete, but the freehold can't...? What then?
    Originally posted by AdrianC
    Presumably either the solicitors undertake only to exchange all the contracts simultaneously, or they make the purchase of the freehold a conditional contract and purify the condition when the rest of the chain exchanges.
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