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Sep, 2014

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  1. #1
    Join Date
    May 2010
    Posts
    206

    Default Difficulty to sell leasehold flat due to court order with freeholder

    Hello everyone,

    I issued proceedings against my freeholder a couple of years ago to restrain him from committing a trespass into the demised airspace above the patio of my leasehold property and breaching the quiet enjoyment covenant by building an extension to his upstairs flat. Upon submitting my claim to the Court for judgement, the freeholder backed down and agreed to enter into a Consent Order with me (signed by the Court) whereby he undertook that for so long as he and I retained our respective freehold and leasehold interests, he would not proceed with building his extension.

    I am now trying to sell my leasehold flat. A buyer has just pulled out on the grounds that the existing Consent Order protects me against the freeholder building his extension but not my successor in title.

    It was not my original intention to enter into a Consent Order with the freeholder and the purpose of my claim was precisely to obtain an injunction from the Court to restrain anyone from trespassing into my property. But the freeholder backed down and I accepted to enter into a Consent Order with him as explained above.

    What can I do now to ensure that I don't lose another buyer? Is there a way I can resubmit my claim to the Court to obtain an injunction that would protect any leaseholder from the freeholder on the grounds that the existing Consent Order is preventing me from selling my flat?

    Many thanks in advance for any help you can offer!

  2. #2
    Join Date
    Jun 2010
    Location
    Foundation trench for New Shed@ Ham on Rye
    Posts
    14,878

    Default

    Yes grant along lease of your term less one day., and as soon as the planning permission expires sell it to the owner for £1.
    Based on the information posted, I offer my thoughts.Any action you then take is your liability. While commending individual effort, there is no substitute for a thorough review of documents and facts by paid for professional advisers. More ramblings atleaseholdpropertymanager.blogspot.com

  3. #3
    Join Date
    May 2010
    Posts
    206

    Default

    Quote Originally Posted by leaseholdanswers View Post
    Yes grant along lease of your term less one day., and as soon as the planning permission expires sell it to the owner for £1.
    Sorry, I don't understand your comment. Please do you mind explaining?

    Also, I should have said that the planning permission will never expire because works had commenced before the proceedings although the freeholder had to hide them away due to his obligation not to proceed under the terms of the consent order.

    Yes renting the flat out is an option but I really want to sell and don't know how to resolve the problem I am having with the planning permission. Any ideas please?

  4. #4
    Join Date
    Jan 2011
    Posts
    490

    Default

    I think this is when an idemnity policy becomes useful! I don't know too much about them but when we bought our flat plus the freehold, our solicitor made the seller take one out before we bought. This policy did have a limited life of ten years.the problem was the the top flat put patio doors in and tried to make a roof terrace on a flat roof! i hope this is of some help to you

  5. #5
    Join Date
    May 2010
    Posts
    206

    Default

    Thanks all for your replies.

    Could the solution to the problem be to sell the flat with an underlease as described in my other thread http://www.landlordzone.co.uk/forums...987#post365987

    If I remain the leaseholder directly under the freeholder but sell the property with an underlease, then surely the Consent Order I have in place with the freeholder would still protect me and, by default, the underlessee. Am I correct? If I stand in between the freeholder and the underlessee, then the freeholder will never be able to build his extension under the terms of the Consent Order I have with him... And then I can provide full protection to my buyer. Is my understanding correct?

    This could be the golden solution as long as I don't need freeholder's consent to have an underlease which, per my other thread, seems to be the case. Am I right?

  6. #6
    Join Date
    May 2010
    Posts
    206

    Default

    Yes my lease allows me to underlet as long as I do so for the whole of the Demised Premises, which is the case here.
    The key thing is that I do not need freeholder's consent to underlet, therefore whether he likes it or not, it doesn't matter. The underlessee will have full protection against the freeholder implementing the planning permission via me.

    Now my last 3 questions please before I take this strategy forward:

    1. If the freeholder eventually sells his freehold interest to someone else (assuming not me or the underlessee), is there a way I can get rid of my lease at that point as the Consent Order I have with the freeholder will become void hence there will be no more point of me standing in between the freeholder and the underlessee?

    2. How long does it take to write an underlease?

    3. Will my existing lease (with the freeholder) need to be modified or will it stay as is? If it needs to be modified, will I require a Deed of Variation to be approved by the freeholder or can the modification be done without involving the freeholder?

    Thanks!

  7. #7
    Join Date
    Dec 2010
    Posts
    874

    Default

    If you simply grant an underlease you will continue to be liable for any ground rent and service charge due to the landlord. Your sublease may oblige your purchaser / tenant to reimburse you, but do you want that hassle? And that's not even getting started on the headache that could be caused if a sublessee breaches a covenant and it's you they come after.

  8. #8
    Join Date
    Sep 2007
    Location
    Merseyside
    Posts
    596

    Default

    Agreed. I wouldn't buy such a lease. Presumably after you 'sell' you want nothing further to do with the development? I don't know about you, but I wouldn't want to buy this sub-lease knowing my landlord was just going to walk away from the whole development after he's gone.

  9. #9
    Join Date
    May 2010
    Posts
    206

    Default

    Quote Originally Posted by Tulula View Post
    If you simply grant an underlease you will continue to be liable for any ground rent and service charge due to the landlord. Your sublease may oblige your purchaser / tenant to reimburse you, but do you want that hassle? And that's not even getting started on the headache that could be caused if a sublessee breaches a covenant and it's you they come after.
    The ground rent is peppercorn (i.e. zero) and there are no service charges. Only 1/4 of repairs and maintenance is payable on receipt of an invoice from the freeholder, which happens as and when. In 10 years, this happened twice. The building is a converted house into 2 flats with each having their own front door. There are no communal parts.

    I prefer an arrangement where I can sell with an underlease rather than see buyers pulling out one after the other because they are concerned that they have no protection against the planning permission. I have such protection but only I have it, it is not transferrable under the existing arrangements.

  10. #10
    Join Date
    Dec 2010
    Posts
    874

    Default

    But what happens if in 5 years time the freeholder decides to replace the roof and your sublessee decides he doesn't have the money to pay for his 1/4?

    It's up to you but you must understand that you will have continuing obligations and liabilities which you may have difficulty in enforcing against the sublessee. I also don't think this arrangement will be as attractive to buyers and their lenders as you think it will be. Sorry to say it but your problem is the terms of the consent order, and I can see no way to go back on that now.

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