Freehold "bona vacantia"

  • Filter
  • Time
  • Show
Clear All
new posts

    Freehold "bona vacantia"

    Been following this site for a while but never bothered to join till now as I have need of some of the advice and guidance I know this site is capable of providing

    The following is taken from a website

    When the freehold vests with the Crown, you may be able to buy it. The Crown will often sell the freehold to leaseholders at market value. At the time of writing ‘market value’ is 15 times the total ground rent for the building in question.

    In some circumstances there is however another potential complication. If the freehold company has gone into receivership and a bank has a fixed charge over the freehold (like a mortgage), they may dissolve the freeholder’s company, sending the freehold bona vacantia, and yet still retain control of the freehold title. In such circumstances, you can’t buy the freehold from the Crown because the receiver remains in control of the title via the fixed charge, yet you’ll still be without a working freeholder until the receiver chooses to sell the freehold to you (or someone else).

    The second paragraph outlines the situation I currently find myself in.

    So let the questions start!

    From the second paragraph it would appear that it is the receiver that needs to be approached to sell the freehold rather than relevant Bona Vacantia division (BVD) of the Government Legal department. Is this correct?

    Does this mean that the lender who has fixed charge over the freehold cannot stop the receiver selling the freehold if the receiver decides to so?

    It would appear that the Tenants/Owners of flats can opt to purchase the freehold of their block under the Leasehold Reform Housing and Urban Development Act 1993 (Collective Enfranchisement).

    The question is whether this still applies when the land is “bona vacantia” with a charge still existing on the land in the situation previously described?

    If the freehold can be purchased from the receiver under Collective Enfranchisement then is there is a legal obligation on the receiver and/or the company having the fixed charge over the land to sell in line with valuations under the guidance note “Apply to buy a freehold reversion (BVC4)” i.e. 15 times ground rent in our case, or can they sell at figure they want?

    Another government website has the following just to throw into the mix

    There are several important ways in which “bona vacantia“ land sales are different from other land sales. These can have important legal consequences so you should take your own independent legal advice as to how they affect you.
    1. if there is a charge or mortgage over the land it will be the responsibility of the purchaser to deal with it and to liaise with the lender to have it released
    What is meant by the need for the buyer to “arrange to have the charge or mortgage over the land released” mean. Is it “simply” having to pay some “legal costs” between the buyer and "lender who has a fixed charge over the freehold" or can the "lender who has a fixed charge over the freehold" demand additional monies above and beyond that paid to the receiver?

    Any thoughts would be gratefully received

    Normally a person buying a house with mortgage , the lender registers a charge over the property at Land Registry. If the borrowers fails to meet the monthly payments, the mortgage lender will repossess the property and sell to another buyer to recover the mortgage loan.

    If the mortgage lender has repossessed the land , then you ( together with other leaseholders in the block ) probably have to buy the land site from the Mortgage lender and NOT from bona vacantia.

    But if the Liquidator takes possession of the land under the rules of Liquidation, then you may have chance to buy the site from bona vacantia.

    So you have to get legal advice ( about liquidation ) and asking which party owns the land and if ground rent is still payable after the Freeholder has passed into liquidation.

    As leaseholders have right to purchase the freehold at 15-20 times ground rent, you need to get agreement with other leaseholders to purchase..


    Latest Activity


    • Freehold purchase with flats
      by Johno_c
      Hi All,

      This is my first post :-)
      I found this forum whilst I was googling about freehold insurance and thought I would ask you guys for opinions about my purchase.

      So I'm in the process of buying a detached house (built 1911) consisting 2 flats with separate entrances...
      23-10-2019, 22:22 PM
    • Reply to Freehold purchase with flats
      by Johno_c
      Sorry to bump this,
      Do you think the above is about right? Please feel free to comment.
      15-11-2019, 15:38 PM
    • Reply to Freehold purchase with flats
      by Johno_c
      Thanks leaseholder64 that is very useful information.

      So a couple of hypothetical situations: and I will make LOTS of assumptions that are most probably wrong.

      Lets say that I have perfectly good freeholder buildings insurance.

      The ground floor flat takes down...
      06-11-2019, 22:19 PM
    • Reply to Freehold purchase with flats
      by leaseholder64
      The lease is only void if:

      1) The freeholder gets a ruling from the FTT that there has been a breach; abd

      2) The freeholder then issues a notice of forfeiture; and

      3) The leaseholder either doesn't seek relief from the courts or the courts don't grant relief....
      05-11-2019, 11:53 AM
    • Reply to Freehold purchase with flats
      by Johno_c
      Thanks again, I appreciate your effort and time and take your point about seeking professional advice. I do like to try and do my own research and have my own understanding of things and this is why I'm asking you guys these questions, many minds are better that one :-)

      I did get the gist...
      05-11-2019, 10:58 AM
    • Reply to Listed Building Consent
      by JamesHopeful
      The interior is listed even though it isn't mentioned: "While some entries will make no reference to the interior, unless it is expressly excluded, it is covered by the listing and may be significant."

      04-11-2019, 21:52 PM
    • Listed Building Consent
      by Cheekster
      I’m in a process of buying a flat inside a grade 2 listed building. The process was going fine until I noticed the floor plan in the lease doesn’t match up with the current floor plan in real life. I can see that there has been structural changes made the flat in the past. Our solicitor has questioned...
      01-11-2019, 14:44 PM
    • Reply to Listed Building Consent
      by Cheekster
      The description online mentions nothing about the interiors inside the building, does it means the inside of the building is not protected and there’s no consent needed to do internal changes in future? We also want to update the floor plan in the lease agreement. Do we do this after the purchase...
      04-11-2019, 14:23 PM
    • Reply to Listed Building Consent
      by Tipper
      You can search the listing records to find out which parts of the building are listed. As said it may only be the outside appearance or could be some particular features both externally and internally. The listing will describe what they have listed.
      04-11-2019, 11:16 AM
    • Reply to Freehold purchase with flats
      by vmart
      Dear John

      In brief, the clause requires the freeholder to take out buildings insurance with a reputable insurer for the full reinstatement value that must meet the requirements of the Council of Mortgage Lenders. It provides latitude for the freeholder to insure against any other risk in...
      04-11-2019, 10:09 AM