Leasehold house - should we still buy?

holliehobbie wrote: »

I would hazard a guess yours is ex local authority then? Much simpler process as no other parties involved other than the council and yourselves. Op would have a much more complicated process.

Leasehold property is very common in Ireland particularly in older parts of dublin.

If the property is residential then you can force the freeholder to sell you the freehold for a small fee by the landlord tenant act 1980, but your solicitor will charge for the conveyance which will make up most of the cost. Only if the lease is less than 30 years to run then i dont think you can but your solicitor will advise.

The main problem seems to be finding who is entitled to the freehold interest and tracking them down. Usually these leases were taken out in the 19th or early 20th century so finding the heirs now of the then lessor can be extremely difficult. Also it is common to find out that your lessor was actually a lessee themselves so you're buying a "sub lease" property. Still usually not a problem and can still buy out the freehold.

Thanks for that ittakestwo, reassuring at least, still wrecking my head over Christmas though.

@spaceHopper no I dont know anything yet, I just know its 50 years into a 175 year lease. Looking at the estate on landirect.ie though it looks like half the houses or more have bought out their leases so hopefully its a non-issue in the end.

Leasehold is very common in Ireland. Has your solicitor given you a copy of the Lease? If not, request it and read it. It will have covenants and conditions contained in the lease you’ll be bound by. Usually when builders sold on in the estate through leasehold it’s cause they wanted conditions in the lease ie stating you can’t build an extension. A small rent fee is paid under the lease but usually actually never paid.

As long as you have more than 70 years in a lease, it’s good marketable title which means you can sell it and mortgage the property. Ideally in your lifetime you’ll want to buy out the freehold with that time frame.

If the estate is land registry title your solicitor can check if neighbours have bought out the freehold. If so that’s a good sign. You can buy out the freehold directly from builder if they are around. If not (or you can’t agree a fair price with them) you can make an application to the grounds rents section to buy the freehold. They will estimate a cost of it usually based on the rent. Expect a few grand for that and legal fees. You do need to meet requirements under law to go that route - your solicitor can advise if you do.

Worse case you can’t, that’s an application to county registrar in Court which will be more expensive. But very unlikely in a house in the estate.

I wouldn’t be put off with leasehold at all.

Have a chat with your solicitor anyway and they will guide you. Most leases are 999 years so never an issue. If you have a shorter lease based on 250 years or less you may have a sub lease is the freehold owner sold on land via leasehold. Then the person with the leasehold further divided the leasehold creating a sub lease

But it doesn’t matter regardless, you can still buy out the freehold the same way. You’re just better off doing it in your lifetime if you buy. I’ve seen families inherit properties and lease expired or only had a few short years and then it gets very expensive to buy out through the court system.

Im the type of mentality that would have to get this sorted ASAP or Id never be able to relax, it just wouldn't feel like it was mine without it.

Anybody I know who’s bought leasehold title like this has bought them out as soon as the house was bought because of the conditions in the lease. It’s common they can’t built any extensions etc so friends sort it now in light of any plans they may have.

On a cost side it may be cheaper for the solicitor to do it all at the same time as registering the house in your name as their solicitor will have the title deeds. Otherwise they will go back to the bank. It can take at least a year to go through the process with the grounds rents section.

The reason for the 70 year rule is that it gets more expensive to buy out the freehold the closer to the time you get it.

More about mortgage to rent: https://www.housingagency.ie/housing-information/mortgage-rent-scheme

There are lots of rules, but that's not the only scheme.