Freeholder gone into receivership - delaying property sale

[Rectory]

We're in the process of selling our leasehold maisonette. There are only 2 properties in the building.

We discovered just before we exchanged contracts that our freeholder has gone into receivership.

Apparently we can buy some sort of insurance which guarantees that if someone else buys the freehold, that they can't suddenly start charging high fees for things.

Is there anything else can we do to help speed the sale through?

Any advice would be gratefully received!

[kikuyu]

We're in the process of selling our leasehold maisonette. There are only 2 properties in the building.

We discovered just before we exchanged contracts that our freeholder has gone into receivership.

Apparently we can buy some sort of insurance which guarantees that if someone else buys the freehold, that they can't suddenly start charging high fees for things.

Is there anything else can we do to help speed the sale through?

Any advice would be gratefully received!

This may not be of immediate help to you but if the freehold interest is to be sold it has first got to be offered to the existing lessees.

This may be a good selling point for the future purchasers of your interest.

[Rectory]

Thanks. I was wondering about that.

If this happens, it sounds like it will over rulethe usual 2 years that a leaseholder has to have owned the property before they can buy the freehold.

Might be a positive to come out of this for our buyer!

[sgclacy]

Does the freeholder have to insure, and if it is not insured you will need to ask the receiver to insure the building, I suggest you get a quote and send it to the receiver. If the receiver will not spend teh money on the premium then send in the monies yourself Then there can really be no excuse for the receiver not insuring the property. The property will need to be insured in the receivers name noting your interest on the policy


If you are unable to get the premium from the other lessee in order to send to the receiver I would take a commercial view, particularly in this market, and pay the premium in full.

[Poppy]

Sorry, there are only two flats in the building and the freeholder has gone into receivership? How did that happen? Is someone not paying their service charge? Is the freeholder a company or a private individual? Who is owed money (ie what goods/service was provided)? Can you help the freeholder out?

You are confusing qualifying lessees' rights to a lease extension and right of first refusal. To qualify for a statutory lease extension requires two years' ownership. Right of first refusal does not require two years' ownership.

I hope you are right in thinking that your buyer will still want to buy when they find out the truth. You may have to sort this out before contemplating a sale.

[kikuyu]

There is always the possibility of serving S42 Notice under the 1993 upon the receiver and assigning the same to the new buyer, thus avoiding the 2 year delay for qualification. Make sure that you have agreed this with the intended purchaser and the fact must be recorded at the Land Registry simultaneously with the sale.

[Rectory]

Thanks for the advice all.

Our freeholder is a company who seems to be the freeholder for many properties in the area. Our buyers solicitor has a similar problem with another flat sale in the area who have the same freeholder.

We don't know any of the details of how the freeholder has gone into receivership and didn't even know until our buyers solicitors did a companies search earlier this week. I'm not sure how they went into receivership and who owed them what.

Apparently, we can continue to exchange of contracts if we have the Absent Landlord indemnity policy and possibly a Contingent Buildings Insurance indemnity policy. This is obviously dependant on our buyer wanting to continue.

[Poppy]

Strangely, you may have the perfect buyer.

Somehow, whoever ends up owning the two leases in your building, really should consider obtaining the freehold (either they buy together or if refused one buys in their sole name). The freehold can be obtained by collective enfranchisement or if it is offered for sale - simply buy it.

Take a look at the Leasehold Advisory Service (http://www.lease-advice.org/cegsframe.htm) website or point your buyer to it.

[kikuyu]

:)Depending on the unexpired terms of the two leases, enfranchising may not cost you all that much. You can then grant yourselves a 999 years each, whilch will benefit your or the buyer's, great, great, great grandchildren.