Conveyancing Question (perhaps)

MarkAnthony

Hypothetical scenario I would like to do some research on and could do with some pointers to the relevant legislation please, if you're feeling generous!

Mr Andrews is purchasing a house from Mrs. Brown; number '12A'. Mrs. Brown originally lived at number '12' and is a successor in title to Mr. and Mrs. Collins who purchased '12' from the local authority in 1976 on a 150 year lease.

Mrs. Brown subsequently built 12A on the side of 12 and sold number 12 on. There is no question over planning, the house was built in 2002 and there is a recent architects certificate in relation to compliance with planning. There is also no question over the sale of 12A the relevant permissions in relation to the lease having been complied with.

Mr Andrews has found out rather late in the day that the house he is looking to purchase is leasehold and has had reassurance from his solicitor that the marketability of the title is just as good as a freehold title as there is 111 years left to run on the lease. Nevertheless Mr. Andrews would like to convert the title to Freehold and Mr. Andrew's solicitor has advised him that is a relatively straight forward process.

Mr. Andrews is left with the following questions:

- What legislation governs the sale of local authority leaseholds?

- Under what circumstances can the local authority refuse to sell the leasehold?

- Would the estimation of approximate 10 times the ground rent + fees be a relatively accurate one for the purchase of the freehold?

- Would the fact that the original transfer order was for number 12 and not for 12A present an issue in purchase of the freehold? Given that some sort of transfer must have taken place from the owners of 12 to the owners of 12A.

- Given the above transaction was between only one party what pitfalls and shortcuts should Mr. Andrews be preparing himself for?

Although this is an entirely fictitious scenario it will not form the basis of legal advice to anyone even in the pub, nor is it homework (thanking God Land law is now over for me) it's an interesting scenario I'd like to do some research on and don't really know where to start.

Thanks in advance

nuac

Without going into other issues, if 12 was part of a housing scheme it is very unlikely that the council would have given p p for 12 A

Pat Mustard

On the phone atm so will check to see if this has been updated, repealed etc. later.

In the meantime, see here: http://www.irishstatutebook.ie/1978/en/act/pub/0016/sec0026.html#sec26

MarkAnthony

nuac wrote: »

Without going into other issues, if 12 was part of a housing scheme it is very unlikely that the council would have given p p for 12 A

Planning is definitely not in issue firstly because this is entirely fictitious and in this hypothetical example the p p has already been fully inspected. Housing scheme has been sold off some years ago (presumably on similar leases) and there has been a fair bit of building in the area of corner sites.

Uno my Uno.

My hypothetical answers to the hypothetical questions

MarkAnthony wrote: »

Mr. Andrews is left with the following questions:

- What legislation governs the sale of local authority leaseholds? Ground rents

As stated above, Ground rents No. 2 1978

MarkAnthony wrote: »

- Under what circumstances can the local authority refuse to sell the leasehold?

None, once consent for sale has been given for for one sale it is not required for any subsequent sale/transfer.

MarkAnthony wrote: »

- Would the estimation of approximate 10 times the ground rent + fees be a relatively accurate one for the purchase of the freehold?

Its not possible to say really as the Folio has presumably being subdivided, a call to the ground rents section at the land Registry would probably be the best way to ascertain this.

MarkAnthony wrote: »

- Would the fact that the original transfer order was for number 12 and not for 12A present an issue in purchase of the freehold? Given that some sort of transfer must have taken place from the owners of 12 to the owners of 12A.

I would not expect it to be so, As above the issue of the subdivision of the original folio would most likely be relevant, a declaration identity from an architect or tother qualified individual should be able to resolve any issues.

MarkAnthony wrote: »

- Given the above transaction was between only one party what pitfalls and shortcuts should Mr. Andrews be preparing himself for?

I'm not sure I follow? there has been no transaction in respect of 12A, if I understand the facts Mrs Brown simply retained it when selling no.12

the best hypothetical advice I could suggest is that it will be 41 years before the title will no longer be of Marketable value. The only relevant question Mr. Andrews need really concern himself with at this point is whether he is entitled to purchase the Ground Rent. In the normal run of things I would expect that answer to be yes but the correct answer would be apparent upon examination of title. if so entitled he has many years to do so.

MarkAnthony wrote: »

Although this is an entirely fictitious scenario it will not form the basis of legal advice to anyone even in the pub, nor is it homework (thanking God Land law is now over for me) it's an interesting scenario I'd like to do some research on and don't really know where to start.

Thanks in advance

This issue crops up occasionally where buyers suddenly become alarmed when discovering the property they are buying is in fact leasehold. The property that was so perfect becomes less attractive and some buyers will actually request that the Freehold be acquired before the sale continues.

I think the notion that a 499 or 999 year lease isn't as good as a Freehold to some extent reflects our national obsession with owning property. There is no practical difference in most cases, especially now that the 2009 Act has changed the Law on Freehold covenants.

MarkAnthony

Uno my Uno. wrote: »

I think the notion that a 499 or 999 year lease isn't as good as a Freehold to some extent reflects our national obsession with owning property. There is no practical difference in most cases, especially now that the 2009 Act has changed the Law on Freehold covenants.

Thank you very much for your answers above. In relation to the quoted section, hypothetically I think Mr. Andrews' issue would stem from his children would not have good marketable title to the house once less than 70 years was left to run on the leasehold. It would certainly be a different matter if it were a 499/999 year lease.

Uno my Uno.

MarkAnthony wrote: »

Thank you very much for your answers above. In relation to the quoted section, hypothetically I think Mr. Andrews' issue would stem from his children would not have good marketable title to the house once less than 70 years was left to run on the leasehold. It would certainly be a different matter if it were a 499/999 year lease.

True, but he has 111 years to purchase the ground rent (although it will get much more expensive if he leaves it that long) and 41 years before the title is unmarketable. Once he is satisfied that the Ground Rent is available the other questions are not particularly relevant IMO.

My advice to him would be that his concerns are misplaced, of course he should plan and protect his investments but his concerns here are easily assuaged. After that it is a case of the best laid plans of mice and men.

MarkAnthony

Thanks again Uno, very much obliged to you.