Leasehold house - should we still buy?

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.

We have a leasehold, house built in the 60's, the owner or owners are similarly unknown and there was a long time left on it when we bought, no-one is trying to collect the rent on it, solicitor also advised it might be hard to track them down, they might be dead.

I grew up in a house nearby that was a leasehold, one of the neighbours bought theirs out when they brought in new regulations, my parents didn't bother, so I was pretty relaxed about it when buying.

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.