500-year lease & groundrent in 1970s housing estate

I've gone sale agreed on a house, have had the relevant engineer, architect etc out and I'm getting close to completion. However, today the solicitor threw a spanner in the works by telling me that this house, which was built in the 1970s (1970s, not 1870s), is not freehold.

Instead, I will be taking out a 500-year lease, will have to pay some sort of ground rent to a 'landlord' and have a number of restrictions on what I can do to it.

I am in disbelief, and the first thing is why does Myhome/Daft etc not have to disclose that on advertisements for houses rather than potential purchasers getting so far into the process (at no little expense to themselves) before they find out that they are "buying" a house where they will be a tenant/not own it freehold? Is that lack of disclosure on something so fundamental not illegal?

While I expect some sort of restrictions in the event of buying into an apartment complex, and I might expect some sort of archaic ground rent obligation if a house were part of some old Anglo-Irish estate, I had never heard of an entire modern housing estate not being freehold and being subject to such archaic property laws. Is this property title common in housing estates built after 1922 in Dublin/Ireland? On a side note, I am also absolutely fascinated about who could possibly be the "landlord" of this entire estate. Why on earth is Irish law accepting the existence of such outdated property laws in 2017?

I had read those stories of Lord Lucan not being paid his ground rent until he turned up to collect it in person, but I never expected this to be the case for a house in a modern estate in Dublin.

I could walk away now, even after spending much time and money checking out this house. It does tick all the right boxes, but signing up to restrictions on what I can do to the house, and paying a rent - even if nominal - is the very reason I have avoided purchasing in an apartment complex. Aside from walking away, what are my options? Could I ever convert this to freehold, and how much more expense would this add to the Celtic Tiger house price I'm already paying? (a special thank you to the Fine Gael party on this for making it easier for people to borrow more money and thus directly being responsible for increasing the price of this house by some €50,000 in the space of 7 months)

And again: why are Irish legislators in this republic in 2017 still facilitating this archaic nonsense? I thought McDowell was blowing years ago about how advanced he was for repealing numerous laws from centuries ago. url=http://www.irishtimes.com/news/new-bill-to-reform-law-on-land-and-conveyancing-1.1014690]'New Bill to reform law on land and conveyancing' (2006)[/url. Is there any hope of this system being ended?

Victor

Fuaranach wrote: »

Aside from walking away, what are my options?

You should be able to buy out the ground rent for something like 25 times the annual rent. I don't know what happens the covenants.

Peregrinus

Irish legislators in 2017 are not facilitating this archaic nonsense; from your own account the lease dates from the 1970s (at least; it could be earlier). You can't create such leases now. It wouldn't have been that unusual for houses to be sold on long leases with ground rents in the 1970s. One reason why this might happen is that the developer himself only owned a leasehold interest in the land; he couldn't offer to sell a freehold interest because he didn't hold one.

As Victor says, you have a statutory right to buy out the freehold if you want to. Obviously the current owners haven't bothered, but if you buy the house you can do it. (Or not, as you prefer.) Victor suggests it will cost you 25 times the ground rent; my recollection is that it's more like 12 times the ground rent but, either way, it's likely to be a trivial sum compared to what you will spend to buy the leasehold interest in the house. Any restrictive covenants associated with the lease will simply fall away when you buy the freehold interest. In addition to whatever you pay to buy out the freehold, you'll have to pay a fee to the Land Registry to register yourself as the freehold owner, currently between €30 and €195 depending on the circumstances of the case.

Having to buy out the groundrent is a nuisance, but it shouldn't be a dealbreaker. If this is the house you want at the price you want, don't let this nuisance deter you.

Victor

http://www.citizensinformation.ie/en/housing/owning_a_home/home_owners/ground_rent.html

http://www.prai.ie/category/services/grservices/

http://www.irishstatutebook.ie/eli/1931/act/55/enacted/en/html
http://www.irishstatutebook.ie/eli/1958/act/2/enacted/en/html
http://www.irishstatutebook.ie/eli/1967/act/3/enacted/en/html
http://www.irishstatutebook.ie/eli/1978/act/7/enacted/en/html
http://www.irishstatutebook.ie/eli/1978/act/16/enacted/en/html
http://www.irishstatutebook.ie/eli/1980/act/10/enacted/en/html

The two 1978 acts are the most relevant.

Peregrinus wrote: »

Victor suggests it will cost you 25 times the ground rent; my recollection is that it's more like 12 times the ground rent

My recollection is that the multiplier was varied a number of times, I think by ministerial order, but hey, it's 5:29am.

Peregrinus

I defer to your sleepy recollection.

RayCun

Our house was built around 1950. We pay groundrent every year, some tiny figure, and we have the option of buying it out but haven't bothered so far.