Leasehold not freehold property

TearFairy

Hi guys,

We are sale agreed on a property for a while now and its currently leasehold not freehold. Obviously this should have been sorted before it went on the market but it hasn't and we are in the position now that the vendors solicitor says they wont be sorting it. Long story short bank will go ahead with our mortgage if we can prove it will be ok for us to buy this when the sale goes through and house is in our name. Our solicitor is leaving a lot of the ground work to me on this but to be honest at this stage I just want to find out whatever I can to get the sale moving.

I have the lease agreement from the 50's but the organisation who held the lease is no longer in existence. Where do I go to find out who has this now (there is a small change the freehold was purchased by the vendors parents before they died but they aren't sure so again is there anywhere I can go to find this out.

Any advice at all would be so welcome

pwurple

How long is left on the lease? Are you talking hundreds of years?

TearFairy

Around 30 years!

juke

TearFairy wrote: »

I have the lease agreement from the 50's but the organisation who held the lease is no longer in existence. Where do I go to find out who has this now (there is a small change the freehold was purchased by the vendors parents before they died but they aren't sure so again is there anywhere I can go to find this out.

Any advice at all would be so welcome

Really, the ball is in the vendor's court to sort this out - as the property isn't marketable with just 30 years left to run on a lease.

You need better guidance from your solicitor on this - to either do the ground work for you, or tell you what information you need to find out. Did your solicitor explain why the arbitration process of buying out the freehold in the Land Registry isn't available to you?

If the vendor's parents did buy out the freehold, then land registry/registry of deeds searches may throw up something, but I would have thought the vendor's solicitor has looked into this, at minimum .

Other avenues:
If the organisation was a company, it might be possible to re-instate it, otherwise it might be possible to make an application the circuit court (county registrar) - your solicitor really needs to go through all of these possibilities with you, explain the process and likely costs.

TearFairy

Juke, thanks a mill for your reply. The vendors solicitor is unreal and has done nothing to help with this whole process. The auctioneer advised them to get a new solicitor but so far they haven't.

Our solicitor doesn't think it's up to us or is something we should do but at the end of the day we want the house and if it's a case we can do this after the sale, (yeah we are aware as we don't own the property we can't buy it out at the moment) then we are prepared to do a bit of work to get it sorted. House ticks almost every box for us so would like to exhaust all avenues before we walk away.

I agree our solicitor should be doing more but this whole process has been an eye opener and as I say if us having to do more than we should means its gets sorted then we will do what we can.

The overall cost of this is a worry though of course!

juke

It sound like a right mess. If the arbitration process isn't available (find out why), then I'd try verify how the institution went out of existence. Also try find out what searches have been done.

I'm acting in a similar case at the moment, a housing association went into liquidation, but searches revealed the liquidator had transferred the freehold to another company.

Where is the house?

TearFairy

This is all new to me so just learning as I go. I was planning on dropping into land registry office in Dublin 7 tomorrow to ask some questions. Im not sure about the whole arbitration thing to be honest but will read up on it tomorrow. House is in Dublin. We have called to few neighbours as several houses have been sold over the last few years in the area but no one seems to have had this issue!

Hope ya get your own house sorted, its really frustrating!!

mrsgiller

If you drop into the land registry office some one from ground rents will come and speak to you and should be able to point,you in the right direction. If previous owners purchased free hold it may just have not been registered, they should be able to find a record of it from the folio number

TearFairy

Thanks for that, hopefully I will be able to find out more tomorrow so!

MarkAnthony

You do tend to find a vendor's attitude (and that of their solicitors) changes markedly when the buyer tells them to go forth and multiply. You have to be actually willing to do it however as any sign you're bluffing will be spotted by the EA and solicitor. The reason it's not been mentioned until now is no one will go within a country mile of it with less than 70 years left to run on the leasehold. I very, very surprised the bank is still willing to loan on it. Have you confirmed that opinion came from the legal team and underwriters rather than the front line mortgage agent?

All that said it's usually very easy and relatively (c.€1000-2000) to convert but usually a bank will require good marketable title before finds are released. In the case of KBC that's 70 years but other banks vary.

TearFairy

MarkAnthony, thanks for your reply. Solicitor contacted bank before Xmas and the legal team came back last week and said ok to go ahead once we can prove we will be entitled to buy the freehold along with a few other conditions.

Now I am fully aware the vendor and their solicitor should be doing this but we are banging our heads off a wall at the minute trying to deal with them so if it's possible to do it myself I will rather than miss out on a house that we really want.
Hopefully today I will make some progress!!

MarkAnthony

To be frank the vendor's solicitor will only do the minimum and rightly so. If the buyer is willing to take the title 'as is' then it's not the place of the solicitor to do extra work at the vendor's expense. Hence why the vendor's solicitor will come off as a lazy asshat. Some of them have the misfortune to be exactly that but many are simply keeping their sides bill down/doing the minimum work for the fixed fee.

This is why you should always be prepared to walk. Once you've a significant amount of money, and worse still emotion, invested in the property the vendor's side know they have you.

As I say through if the bank is on board it's more a case of extra expense for you rather than anything fatal to the purchase.

Best of luck.

TearFairy

As of yet neither the vendors solicitor nor the auctioneer are aware that the bank have agreed to allow us to do this as we have not been in touch with them. I can assure you the title lazy ass and a lot more is well earned by the vendors solicitors. As soon as our solicitor spotted the issue and contacted the other solicitor she advised her clients to do nothing and not to bother sorting it out as it would cost them to do so. We said all along until yesterday that we wouldn't be prepared to buy it without this being sorted and like I say we haven't informed them until I know exactly what's involved.

Regarding walking away, not so much emotion involved as in we have put months into this house, have had our structural engineer report done and was happy with it and to be honest would rather avoid another year of trying to find a house within our budget only to be outbid and be given the run around by auctioneers! So for now we will plough on, cheers for the advice I appreciate it

P. Breathnach

Do you know if the vendor is aware of what his or her solicitor is doing (or more to the point, not doing)? And that such an attitude might jeopardise the sale?

I'm not a great fan of making a direct approach to the other party when solicitors are supposed to act as intermediaries, but the EA might provide a back channel. Even if you are not keen on the idea of walking away, you can always rattle the sabre by suggesting that you might be forced to pull out.

TearFairy

EA is refusing to deal with their solicitor now because she has been such a nightmare - he has made the vendors aware of this but in almost a week they haven't contacted him back when he suggested they change solicitors. I find it all pretty incredible at this stage!

sami2015

Hi TearFairy,
I am facing a similar situation on a property that I went SA on a few weeks ago.... I was wondering if you have made any progress in the last months?

Thanks,
sami

TearFairy

Hi Sami,
You have my sympathy!! Its been a frustrating few months but we are finally getting the keys next week - I hope!!

Our problem was there was such a short length of time left on the lease that the bank wouldn't agree a loan for a lease less then 75 years. Buying out the freehold isn't a major issue but its a long one that can take up to a year and we couldn't start the process as house wasn't in our name.

Who long is left on the lease and is the landlord still in existence?

sami2015

Hi TearFairy,
there is 58/59 years on the lease and the LL is no longer in existence.... My bank is also saying that they won't advance the money without the leasehold but that will take some time....

Did your vendor go ahead and buy it out or did you finally get your bank to agree? It is a very frustrating time... I wish they had gone ahead with these things before putting the house up for sale.....

SarahMollie

I had an issue with the leasehold on a portion of the driveway of a property I was previously sale agreed on. My solicitors digging unearthed that the vendor had already paid off a previous claim from someone who had a freehold that had expired, but there was no absolute title, only posessory title, which could be challenged at any point. The land registry process could take years as the documentation was only partial, and I was advised to walk away.

It was actually a row of 3 townhouses that was effected and I found out through the EA that every buyer pulled out due to this issue.

Sometimes it sucks as you love the house and its right there in front of you, but you could potentially be storing up trouble for the future. IMO the onus is on the vendor to bring a property to market with all of this tidied up, but obviously if they think they can sell without doing so, then why would they bother.

I wouldnt make it easy on them, and I'd pull my deposit.

TearFairy

Totally agree the house should come on the market in a sellable condition but its not always the case.
In our case the vendors finally agreed to start the process, register to buy the freehold. This generates a ref number and the eventual freehold will go into our name - took about 1 month to arrange. Basically if the landlord is no longer in existence the freehold is bought by a process called arbitration.
If you want to pm me I will go into more detail

4ensic15

TearFairy wrote: »

Totally agree the house should come on the market in a sellable condition but its not always the case.
In our case the vendors finally agreed to start the process, register to buy the freehold. This generates a ref number and the eventual freehold will go into our name - took about 1 month to arrange. Basically if the landlord is no longer in existence the freehold is bought by a process called arbitration.
If you want to pm me I will go into more detail

The bank will give the loan if they are supplied with an opinion from a barrister that the freehold can be bought. It typically costs €750 for such an opinion.

sami2015

Hi 4ensic15,
thanks for that.... my mortgage broker has gone out to various banks to check their requirements and we may end up taking this route. I assume that my solicitor would know how to find a barrister experienced in preparing such opinions.... but if you can recommend a specific one please let me know by pm.

Thanks again,
sami

TearFairy

Sami our bank wanted solicitor to confirm freehold could be bought as 4ensic as mentioned but they also insisted that the solicitor had to complete the process for us. We refused as that would have cost us an extra couple of thousand in legal fees for something that land registry will confirm does not in no way shape or form need an solicitor intervention.
You option there is this happens is to go back to vendor and insist your future legal fees for this is deducted off the house price

4ensic15

TearFairy wrote: »

Sami our bank wanted solicitor to confirm freehold could be bought as 4ensic as mentioned but they also insisted that the solicitor had to complete the process for us. We refused as that would have cost us an extra couple of thousand in legal fees for something that land registry will confirm does not in no way shape or form need an solicitor intervention.
You option there is this happens is to go back to vendor and insist your future legal fees for this is deducted off the house price

It is not surprising the bank wanted the solicitor to complete the transaction. The solicitors undertaking to do it is their guarantee that their security will be either a freehold premises or the solicitors professional indemnity insurance.
It should be worth a hefty discount on the purchase price to accept such a title.