Option to buy a Headlease: is the property right secure?

Collapse
X
  • Filter
  • Time
  • Show
Clear All
new posts

    Option to buy a Headlease: is the property right secure?

    This is an unusual situation. I purchased an option to buy a 999 year Head Lease subject to a short under lease with 50 years to reversion. The option can be exercised at any time and upon exercising, the pre-drafted Headlease comes into existence, sitting inbetween the Freehold and the short Leasehold, with the benefit of the latter's reversion. Thus it effectively has the same economic value as the Headlease it refers to, but with the advantage of being easier to transfer (assign), similar to an SPV. It is mentioned in the Freehold title in the land registry. My solicitor is concerned however that without actually exercising the option and creating the Headlease, there's nothing preventing the freeholder from granting a lease extension to the leaseholder, thus reducing the entire value of the option/headlease to next to nothing. He doesn't say that this is definitely the case, but that he can't guarantee that it's not the case. So the solution to secure my property rights would be to exercise the option immediately upon completion of the option purchase and then own the Headlease. I would/will do that if needed, however if it can be avoided without putting property rights at risk I would prefer to keep the option unexercised, as a) I would save the cost of exercising/registering the headlease, b) it would make it easier to sell it in the future, c) avoids the hassle of collecting the service charge from the leaseholder and passing it to the freeholder. I would therefore be interested in hearing from others. I have obviously already hired a conveyancing solicitor for this, so any ideas/free advice will be passed on to him but if there is scope to work with someone else in a professional capacity, they will probably need to coordinate or have the case transferred, so that's something to keep in mind. Thanks in advance.

    #2
    The leaseholder has the legal right to seek a statutory 90 years lease extension from the freeholder, if there is no headlessee.

    The Land Registry will show for your post code address; the name of holder of freehold title and name of holder of leasehold title.

    Comment


      #3
      Originally posted by Gordon999 View Post
      The leaseholder has the legal right to seek a statutory 90 years lease extension from the freeholder, if there is no headlessee.
      The question is whether the option for the headlease counts as a headlease for this purpose

      Comment

      Latest Activity

      Collapse

      • retrospective notice of assignment
        eagle
        Hi,
        bit of an oddity, my freeholder has come back (this was brought to light by change of bank account by new owner) that they don't have a notice of assignement... for a transaction back in 2012. Me (my flat) to the new owner.

        Everything else is in place and I am on good terms with...
        04-06-2019, 10:48 AM
      • Reply to retrospective notice of assignment
        eagle
        Hi,
        a rather late reply but its taken this long to get over the line.
        I checked others leases obtained from Land Registry and they were all the same, notice only specified in writing, nothing else.
        In between they wrote asking again for the notice to be sent (via solicitor) or would...
        23-08-2019, 13:46 PM
      • Remortgaging to a BTL so much to pay!
        Loftmonster
        My wife and I are in the process of remortgaging our home to a BTL and buying a new home.

        I've been in discussions with a mortgage advisor for the last couple of weeks. The purchase mortgage is straight forward but the BTL mortgage is proving a bit more difficult to decide upon. We...
        21-08-2019, 00:59 AM
      • Reply to Remortgaging to a BTL so much to pay!
        loanarranger
        What is the research provided by your broker in focusing on BM Solutions , they are no longer a lender who is the automatic 1st choice

        Ask your broker why he didn't quote the following:-
        Santander 1.39% 27 months fixed including Free Legals
        Barclays 1.41% 27 months fixed including...
        21-08-2019, 16:27 PM
      • Reply to Remortgaging to a BTL so much to pay!
        Loftmonster
        Thank JP, yeah i was thinking we should fix for longer but if landlording doesn't work out we will have to pay big early repayment charges if we sell.

        The lender our broker has recommended (BM Solutions) pays £300 casback on legal fees. Our solicitor is quoting almost a grand so thats...
        21-08-2019, 08:14 AM
      • Reply to Remortgaging to a BTL so much to pay!
        jpkeates
        Most BTL mortgage lenders will use their own solicitor for conveyancing at no (direct) cost to the lender).
        You usually can add the product fee to the amount borrowed - on the basis that you hope the property value increases by at least that.

        While I appreciate that landlording may...
        21-08-2019, 07:48 AM
      • Address wrong on Land Registry Title. A little rant. and request for empathy.
        Logical.Lean
        We are buying a property built in 1847, with some interesting history, and are somewhat frustrated by the both our own solicitor and the vendor and their solicitor.

        Since having our offer accepted, on a house with no chain, either end, it has been 16 weeks, but the last 4 weeks have been...
        06-08-2019, 18:50 PM
      • Reply to Address wrong on Land Registry Title. A little rant. and request for empathy.
        Logical.Lean
        So eventually I phoned the Estate agent and explain that I'm now being told by our solicitor that the vendors solicitor had put in this application, but I'd like proof, if that were possible.
        30 mins later she sent an email, which had an email.from.their solicitor saying it had been done on the...
        20-08-2019, 09:50 AM
      • Solicitors Negligence Question
        Freddie thumb
        I'm read these forums for a little while and just signed up to ask a quick question. I'm not sure if this is 8n 5he right place.

        So I bought a property in 2008 and discovered that the Title to my property was defective in 2015. Basically there was a piece of land on the title of my property...
        12-08-2019, 08:40 AM
      • Reply to Solicitors Negligence Question
        Lawcruncher
        Are you saying that the Land Registry plan does not match the apparent boundaries of the land you occupy? If so, is the problem that you occupy land not shown as yours on the plan or that a neighbour occupies land shown as yours on the plan?
        16-08-2019, 09:46 AM
      Working...
      X