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Oct, 2014

Thursday

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  1. #11

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    Thanks Pilman,

    I was advised that when coming to sell the Property buyers needing a Mortgage may find it difficult to secure one with the FH being absent.

    I am actually OK with the 990 years on the Lease as I will be renting it out for quite some time , and there does not appear to be any major issues with increasing rates of Maint / Rent etc...

  2. #12
    Join Date
    Jun 2010
    Location
    Foundation trench for New Shed@ Ham on Rye
    Posts
    15,037

    Default

    There is a not a great deal more that I can add other than it depends on the lease.

    The concern of a buyer and a mortgagee is if the responsibility for maintenance of the building as opposed to the flats, which are most often the flat area and everything inside up to an including the plaster, then your freeholder is two people one of whom is awol, and the other less than motivated. What happened in the past is irrelevant it is what the lease says. Now if the lease includes in your demise the walls and structure and services and the other one similar then the landlords obligations are relatively few. However if one or other is in breach and there is no one in place to enforce the covenants then that is another concern...

    As to the freehold ownership currently you are buying a lease and that's all the BS are interested in. An absent freeholder can be dealt with exercising the right to manage, .The shorter lease issue can be resolved by application to the Court and LVT, once as explained you have both or she, for a lease extension, have advertised and investigated to the best of your ability and can convince a court. A payment will have to be made representing a lease extension vlaue.

    However unless the deeds to the freehold (or the lease or if the FH is owned by a company , in its Articles) require the transfer of the freehold on a sale of a lease, I cannot see a right to force their interest into your hands, it remains the property of lady and Awol. She has to convince the Court to empower to make decisions in his absence as the freeholder.She might be able to convince them to transfer from AWOL + Her to Her + you, but on balance I am not sure a Court will be happy to do so so soon.
    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. #13
    Join Date
    Apr 2006
    Location
    Hampshire
    Posts
    1,047

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    I think some of the confusion is caused by people thinking that somehow a mortgage lender could take a charge on the freehold title.

    Think about it. The freehold will be jointly owned by A & B who reach have separate flat leases. If B wants a mortgage on his flat why on earth should A co-operate and be lumbered with a joint mortgage liability so that the freehold can be charged as well as the leasehold for the benefit of B. So they can only take a charge on the leasehold.

    Ideally lenders should refuse to lend on these "shared freeholds" unless there are mechanics in place, e.g. a deed of trust, which enables the "share" in the freehold to be transferred if the co-freeholder has disappeared (typically after repossession) or refuses to co-operate in the the transfer.
    RICHARD WEBSTER

    As a conveyancing solicitor I believe the information given in the post to be useful (provided it relates to property in England & Wales) but I accept no liability except to fee-paying clients.

  4. #14
    Join Date
    Jun 2010
    Location
    Foundation trench for New Shed@ Ham on Rye
    Posts
    15,037

    Default

    But then they are only really lending on the flat, which can be transferred by A who can retain his interest in the FH. There may be lease extensions or development rights or a loan to be repaid, though in many case the FH is relatively unencumbered, and in various forms there are requirements to transfer one with the other.

    I do agree that lenders and their solicitors not to mention the poor buyer should look closely at the affairs and set up of any freeholder whether joint owners or trust or company so that terms of leases are enforced, and especially where consent to assign is required.

    Where there are only two is is vital that there is some form of dispute resolution or a means of automatic transfer.
    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

  5. #15
    Join Date
    Dec 2012
    Location
    Isle of Wight
    Posts
    282

    Default

    Quote Originally Posted by Richard Webster View Post
    I think some of the confusion is caused by people thinking that somehow a mortgage lender could take a charge on the freehold title.

    Think about it. The freehold will be jointly owned by A & B who reach have separate flat leases. If B wants a mortgage on his flat why on earth should A co-operate and be lumbered with a joint mortgage liability so that the freehold can be charged as well as the leasehold for the benefit of B. So they can only take a charge on the leasehold.

    Ideally lenders should refuse to lend on these "shared freeholds" unless there are mechanics in place, e.g. a deed of trust, which enables the "share" in the freehold to be transferred if the co-freeholder has disappeared (typically after repossession) or refuses to co-operate in the the transfer.
    This is one of those things that is obvious once pointed out!

    Just for my curiosity though, is it that the joint owner of a shared FH would have to consent to a mortgage charge, or is it just that because the mortgagee would not be able to gain possession (because of the joint owner) it's pointless?

    I did think prior to your post that a charge could be placed on a tenant-in-common share but that because a mortgagee could not ever exercise exclusive possession there was no point. Surely though with a FH share as here, possession isn't an issue as it can be exercised through the LH charge. So why not take the FH charge anyway?
    caveat emptor
    If it sounds like I know what I am talking about........I don't.

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