Leasehold query
Discussion
My son has agreed the sale of his house, it has 947 yrs left to run on the lease, the prospective buyer was aware of this situation when he made the offer. The prospective buyer is now holding up the sale saying he, not my son, wants to purchase the lease before completing. Can this be done? Can he buy the lease of my son's house without my son knowing or, as I've read, if the lease is going to be sold does my son have to be involved and offered "first refusal"? I can't understand why the buyer just doesn't complete the purchase of my son's house and then buy the lease when he owns the property?
jned2 said:
My son has agreed the sale of his house, it has 947 yrs left to run on the lease, the prospective buyer was aware of this situation when he made the offer. The prospective buyer is now holding up the sale saying he, not my son, wants to purchase the lease before completing. Can this be done? Can he buy the lease of my son's house without my son knowing or, as I've read, if the lease is going to be sold does my son have to be involved and offered "first refusal"? I can't understand why the buyer just doesn't complete the purchase of my son's house and then buy the lease when he owns the property?
Not sure I follow this one. He's already buying the lease not the building. In very simple terms, your son is selling the lease not the house as the house is owned by the freeholder.
Does the buyer mean he would like to buy the freehold and then wind up the lease? They'd need to engage with the freeholder and it's obviously going to depend on those rules and regs etc.
Is there a reason why the two conveyancers aren't just dealing with this?
The new purchaser is unlikely to be able to buy the freehold either easily or quickly:
1) He has no automatic right to do so; and
2) Unless he offers massively over the odds, the freeholder has no incentive to sell.
He is better off waiting until after he is the legal owner and then either approaching the landlord formally or informally.
I've owned properties with similarly long leases and have not found them problematic. The main "leasehold issues" are with modern short leases.
1) He has no automatic right to do so; and
2) Unless he offers massively over the odds, the freeholder has no incentive to sell.
He is better off waiting until after he is the legal owner and then either approaching the landlord formally or informally.
I've owned properties with similarly long leases and have not found them problematic. The main "leasehold issues" are with modern short leases.
Apologies for any confusion, it is a bizarre situation !!
My son is selling his house, it has 947 years left to run on the lease. He has accepted an offer, so he has a buyer.
This buyer wants to buy the freehold of my son's house first, then once he has the freehold then buy my son's house.
I know it sounds ridiculous and I don't know why he wants to do it that way round, or if he can do it that way round, but that is where were at !!!
My question is can he buy the freehold of the house before he owns it?
My son is selling his house, it has 947 years left to run on the lease. He has accepted an offer, so he has a buyer.
This buyer wants to buy the freehold of my son's house first, then once he has the freehold then buy my son's house.
I know it sounds ridiculous and I don't know why he wants to do it that way round, or if he can do it that way round, but that is where were at !!!
My question is can he buy the freehold of the house before he owns it?
LooneyTunes said:
The new purchaser is unlikely to be able to buy the freehold either easily or quickly:
1) He has no automatic right to do so; and
2) Unless he offers massively over the odds, the freeholder has no incentive to sell.
He is better off waiting until after he is the legal owner and then either approaching the landlord formally or informally.
I've owned properties with similarly long leases and have not found them problematic. The main "leasehold issues" are with modern short leases.
Many thanks, that's what I suspected.1) He has no automatic right to do so; and
2) Unless he offers massively over the odds, the freeholder has no incentive to sell.
He is better off waiting until after he is the legal owner and then either approaching the landlord formally or informally.
I've owned properties with similarly long leases and have not found them problematic. The main "leasehold issues" are with modern short leases.
jned2 said:
Apologies for any confusion, it is a bizarre situation !!
My son is selling his house, it has 947 years left to run on the lease. He has accepted an offer, so he has a buyer.
This buyer wants to buy the freehold of my son's house first, then once he has the freehold then buy my son's house.
I know it sounds ridiculous and I don't know why he wants to do it that way round, or if he can do it that way round, but that is where were at !!!
My question is can he buy the freehold of the house before he owns it?
He could, but he has no right to. The freeholder can just say no.My son is selling his house, it has 947 years left to run on the lease. He has accepted an offer, so he has a buyer.
This buyer wants to buy the freehold of my son's house first, then once he has the freehold then buy my son's house.
I know it sounds ridiculous and I don't know why he wants to do it that way round, or if he can do it that way round, but that is where were at !!!
My question is can he buy the freehold of the house before he owns it?
Being the leaseholder puts you in a much better position.
jned2 said:
Apologies for any confusion, it is a bizarre situation !!
My son is selling his house, it has 947 years left to run on the lease. He has accepted an offer, so he has a buyer.
This buyer wants to buy the freehold of my son's house first, then once he has the freehold then buy my son's house.
I know it sounds ridiculous and I don't know why he wants to do it that way round, or if he can do it that way round, but that is where were at !!!
My question is can he buy the freehold of the house before he owns it?
All they have to do is phone up the actual freeholder and offer them £1bn for the freehold. He'll then own it within 24 hours and can buy the leasehold from your son without causing your son any issues. My son is selling his house, it has 947 years left to run on the lease. He has accepted an offer, so he has a buyer.
This buyer wants to buy the freehold of my son's house first, then once he has the freehold then buy my son's house.
I know it sounds ridiculous and I don't know why he wants to do it that way round, or if he can do it that way round, but that is where were at !!!
My question is can he buy the freehold of the house before he owns it?
Ie, it sounds like your son has hooked a tyre kicking loon who has been programmed by their crazy dad's readings of the Daily Mail all about how leases are bad and freeholders are part of the lizard elite.
I'm afraid, it might be best to cut the line and recast for a buyer rather than a loon?
jned2 said:
I know it sounds ridiculous and I don't know why he wants to do it that way round, or if he can do it that way round, but that is where were at !!!
He probably doesn't know that as the leaseholder he has a right to buy it and/or is worried by the ground rent horror stories associated with some newer leases. Except in the most extreme cases, it is not going to be expensive to buy the freehold.Really he needs to speak to his solicitor who should be able to put his mind at rest.
If he insists on proceeding as he says, remarket the property on the basis that you (and he) have no idea how long it will take (if indeed he will eventually) be in a position to proceed.
Unfortunately your son is selling to an idiot.
My father was selling his 999 year lease to one such person last year. The buyer couldn't get their head round the fact that there's very little difference between a 999yr lease at a peppercorn and a freehold interest. They demanded my father buy the freehold as they wanted to do alterations to the house which they couldn't do without owning the freehold - no amount of explaining by me, my father or any of the solicitors or agents involved could persuade them otherwise. The fact that my dad had built a double garage in the 70's and a 2 storey extension in the 80's, without issue didn't satisfy them. The fact that my dad's neighbour was 90% complete on a £1.5m redevelopment of the former barn next door (my dad's house being the former farmhouse) didn't satisfy them. Nor the fact that the other neighbour lived in a 70's house built in my fathers former garden. Nor the fact that if you stood at my dad's front door that 70% of the houses you could see had been demolished and substantially larger houses built to replace them, many in the last 10 years.
In the end my dad withdrew from the sale as this was not their only stupid demand and was the straw that broke the camels back.
As others have pointed out, they have clearly confused a modern long lease (125-250 years) with regular rent reviews (that can be troublesome), with a 999 year lease. Tell them to speak to their solicitor and then get them to explain why they need the freehold (they don't). And if they continue to insist I'd be putting the house back on the market.
My father was selling his 999 year lease to one such person last year. The buyer couldn't get their head round the fact that there's very little difference between a 999yr lease at a peppercorn and a freehold interest. They demanded my father buy the freehold as they wanted to do alterations to the house which they couldn't do without owning the freehold - no amount of explaining by me, my father or any of the solicitors or agents involved could persuade them otherwise. The fact that my dad had built a double garage in the 70's and a 2 storey extension in the 80's, without issue didn't satisfy them. The fact that my dad's neighbour was 90% complete on a £1.5m redevelopment of the former barn next door (my dad's house being the former farmhouse) didn't satisfy them. Nor the fact that the other neighbour lived in a 70's house built in my fathers former garden. Nor the fact that if you stood at my dad's front door that 70% of the houses you could see had been demolished and substantially larger houses built to replace them, many in the last 10 years.
In the end my dad withdrew from the sale as this was not their only stupid demand and was the straw that broke the camels back.
As others have pointed out, they have clearly confused a modern long lease (125-250 years) with regular rent reviews (that can be troublesome), with a 999 year lease. Tell them to speak to their solicitor and then get them to explain why they need the freehold (they don't). And if they continue to insist I'd be putting the house back on the market.
Can the freehold purchase process be kicked off by your son, then taken over by the buyer?
I'm pretty sure this can be done with lease extensions, especially now there is no need to own a lease for more that 2 years (it changed recently) before you had the right to extended.
If its any help this website is very useful for leasehold advice
https://www.lease-advice.org/
And these are the specialist solicitors I'm going to use
https://leaselaw.co.uk/
They have been very helpful so far
Alternatively as others have said the buyer seems like a loon who doesn't understand a leasehold house with a near 1000 year lease is not an issue!
I'm pretty sure this can be done with lease extensions, especially now there is no need to own a lease for more that 2 years (it changed recently) before you had the right to extended.
If its any help this website is very useful for leasehold advice
https://www.lease-advice.org/
And these are the specialist solicitors I'm going to use
https://leaselaw.co.uk/
They have been very helpful so far
Alternatively as others have said the buyer seems like a loon who doesn't understand a leasehold house with a near 1000 year lease is not an issue!
As I posted elsewhere, I don't quite get the point of keeping the freehold when there's a 999 year lease in place.
Sure you get a small annual rent, but what rights do you have from owning the freehold?
From a lease buyer's pov - how much trouble could the freeholder cause you if they wanted to be a prick?
Sure you get a small annual rent, but what rights do you have from owning the freehold?
From a lease buyer's pov - how much trouble could the freeholder cause you if they wanted to be a prick?
OIC said:
I don't quite get the point of keeping the freehold when there's a 999 year lease in place.
Because eventually you (your descendants) get back the thing you've purportedly sold. OK it's a long wait!Perhaps more significantly the "ground rent" might start at £100 and increase every few years by significantly more than inflation. This looks harmless at first but the compounding effect can be significant over a few decades. Hence the new rules from 2022 which outlawed the practice, going forwards, although existing ground rents continue. Buy out the freehold and the whole thing goes away.
Panamax said:
Perhaps more significantly the "ground rent" might start at £100 and increase every few years by significantly more than inflation. This looks harmless at first but the compounding effect can be significant over a few decades. Hence the new rules from 2022 which outlawed the practice, going forwards, although existing ground rents continue. Buy out the freehold and the whole thing goes away.
Very rare for this to be the case with older leaseholds. It’s generally the more recent ones that are problematic. They’re often barely worth collecting. Iirc the last one I had was less than £10 Pa and had not increase mechanism as all.
Panamax said:
OIC said:
I don't quite get the point of keeping the freehold when there's a 999 year lease in place.
Because eventually you (your descendants) get back the thing you've purportedly sold. OK it's a long wait!Perhaps more significantly the "ground rent" might start at £100 and increase every few years by significantly more than inflation. This looks harmless at first but the compounding effect can be significant over a few decades. Hence the new rules from 2022 which outlawed the practice, going forwards, although existing ground rents continue. Buy out the freehold and the whole thing goes away.
LooneyTunes said:
Panamax said:
Perhaps more significantly the "ground rent" might start at £100 and increase every few years by significantly more than inflation. This looks harmless at first but the compounding effect can be significant over a few decades. Hence the new rules from 2022 which outlawed the practice, going forwards, although existing ground rents continue. Buy out the freehold and the whole thing goes away.
Very rare for this to be the case with older leaseholds. It s generally the more recent ones that are problematic. They re often barely worth collecting. Iirc the last one I had was less than £10 Pa and had not increase mechanism as all.
OIC said:
As I posted elsewhere, I don't quite get the point of keeping the freehold when there's a 999 year lease in place.
Sure you get a small annual rent, but what rights do you have from owning the freehold?
From a lease buyer's pov - how much trouble could the freeholder cause you if they wanted to be a prick?
I had a residual of a 999 year lease with a peppercorn rent, if collected; for a few pence my father bought me a bag of peppercorns. The main problem with not having the freehold is the possible power to stop or demand a lot of money for permission to do alterations/extensions.Sure you get a small annual rent, but what rights do you have from owning the freehold?
From a lease buyer's pov - how much trouble could the freeholder cause you if they wanted to be a prick?
DonkeyApple said:
All they have to do is phone up the actual freeholder and offer them £1bn for the freehold. He'll then own it within 24 hours and can buy the leasehold from your son without causing your son any issues.
PH at its best 
In this scenario OP you can then tell him to FO and sell the lease to someone else.Forums | Homes, Gardens and DIY | Top of Page | What's New | My Stuff