Flying Freehold

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    Flying Freehold

    Hi

    Me and my business partner seem to have hit a stumbling block in our purchase. Our current solicitor is insisting on a change to the boundary the sellers solicitor has tried to remedy this but cannot.

    Are you able to offer some informal advice on this matter?

    Have you come across Flying Freehold issues like this in the past? Please see below emails we received on Friday from our solicitor and the sellers.

    From our solicitor.
    Good Afternoon,
    Unfortunately, we have reached an issue with the seller’s solicitor which will prevent this matter from proceeding.
    The title plan for the property does not correctly show the full extent of the property. Part of the property extends over the passageway.
    They have refused to rectify this at the Land Registry.
    We cannot certify title to your lender, as part of the property will not be within their security. You or your lender would not get legal title to this land. This is a major issue.
    The seller’s solicitor has advised they will be asking their client to remarket the property, as we will not accept this.

    From the sellers.
    We hold an indemnity policy for the flying freehold of the alley way and when we purchased the property this is what we were told we would need as the land registry do not change the deeds on this. So the policy covers us. Our buyers solicitors said they are adamant they want us to get land registry to change the deed on the alley way but we were advised by our solicitor that this cannot be done anymore and changed around 15 years ago and this is why indemnity policies were bought in to cover this. Our solicitor got advice from many legal experts who agreed with her that land registry do not change this now and the indemnity policy is enough to cover this. Even knowing this our solicitor still applied to land registry so she could show this to our buyers solicitors as an official reply. This was received back from the land registry today advising that they will not be able to action this request. Our solicitor sent this to our buyers solicitors to make them aware land registry cannot do it but we have an indemnity policy to settle this matter. They came back and were adamant we had to change this with land registry even after being told we cannot, our solicitor advised them of the advice she had been given by other professionals, land registry and even quoted the legals to them but they stood firm and told us they would advise our buyer to pull out. The whole of our property is owned by us, the buyers solicitors are suggesting otherwise. We have the indemnity policy and we have been able to have a mortgage on this property and many other properties in Nottingham have the same policy to cover the flying freeholds.
    We were advised the buyers have pulled out and should put the property back on the market, which you have said is not the case?


    The Flying Freehold forms a tiny part of the property and of that 50% is ours.

    As you can imagine both myself and my business aren't happy with this situation and would like to find a solution as soon as possible.

    Any help would be appreciated!


    Kind regards,

    Dal

    #2
    Update from our solicitor below.

    Good Morning,

    Our position is that the title is defective and needs to amended before we can proceed.

    You will not legally own that part of the property. It is not the flying freehold which is the issue. The issue is that you will not own part of the property.

    Indemnity insurance is not suitable. You have a non-standard lender, they are unlikely to accept this.

    We can report to your lender if they wish, but you should be aware the last matter I dealt with of this nature, the lender cancelled the mortgage offer.

    Comment


      #3
      You say that you only own 50% of the flying part.

      If 50% then it may not actually be a true flying freehold as each property will own 50% of the footprint of the passageway below the flying part and each will have the right to pass over the others half.

      Comment


        #4
        image sharing

        Without seeing the LR plan and knowing the layout it is not possible to comment definitively, but I think your solicitor is probably being overcautious.

        The above plan shows two properties looked at from the street. The brown shows a covered passageway. The blue and red is the property you want to buy with the red being the part of the building above the passageway. The yellow is the next door property. The red edging on the LR plan does not extend to include the red.The red is freely accessible from the blue but not from the yellow.

        If the above is the case, then there are three good reasons why the red is included in the title of the blue.

        The first is that it cannot possibly have been the developer's and first purchaser's intention not to include the red. Accordingly, section 62(2) of the Law of Property Act 1925 applies and operates to confirm that the red is included. (The foregoing does not apply if the conveyance or transfer excluded the operation of the section. However, even if the section is excluded there has to be an assumption that the plan did not correctly show what was intended to be conveyed or transferred.)

        The second is that section 60(2) of the Land Registration Act 2002 provides that a boundary for registration purposes is only a general boundary and does not show the exact boundary. The extent to which the general boundary rule applies is more ample than many think and will certainly cover your situation. If the LR has declined to change the position of the red line it is no doubt because they consider the position is covered by the general boundaries rule.

        The third is that it is a fundamental principle of English land law that possession is a root of title. If you are in possession of freehold land and the possession is not otherwise explained (e.g. because you are a tenant or licensee) then you have title to it and only someone with a better title can oust you. The only possible candidates are the owner of the yellow, who will certainly fail as he is not in possession, and the developer who, if he is aware of the position and is unwise enough to take action, will also fail because a court will tell him he must have intended to include the red.

        So, whilst ideally the red should be shown on the LR plan, the fact that it is not does not mean that the title is defective because statute and the common law together operate to give you title to it.

        What you have is the classic situation which careful analysis shows is not actually a problem in that nothing is likely to happen to deprive the owner of the red, but is a problem because someone may perceive it to be a problem and not be persuaded by a careful analysis, not least because he wants to avoid a negligence claim from a lender. So, it comes down to whether you can persuade your solicitor to take a more robust attitude.

        Comment


          #5
          Hope this helps.

          Comment


            #6
            The plans do not require me to change anything I said above.

            How old are the properties?

            Comment


              #7
              Hi Lawcruncher,

              Thank you for you help!

              I think the properties were built around 1890-1900.

              Please see below last response from the Land Registry to the sellers solicitor.
              Unfortunately on First Registration none of the deeds inducing the same, or plans were retained in our files, if you could supply the same we will look into the matter for you.

              Comment


                #8
                Attached Files

                Comment


                  #9
                  Originally posted by Dal1 View Post
                  Indemnity insurance is not suitable. You have a non-standard lender, they are unlikely to accept this.

                  We can report to your lender if they wish, but you should be aware the last matter I dealt with of this nature, the lender cancelled the mortgage offer.
                  This seems to be the nub of the matter.

                  Your solicitor doesn't have a problem with such an indemnity; he is simply advising you, from his previous knowledge, that your proposed mortgage lender doesn't accept them and will not lend you the money.

                  It is your lender's policy of not accepting such indemnities that is blocking things, not the solicitor(s), not the land registry.

                  So unless you can persuade your mortgage lender to change their policy, you either need to find another lender who will mortgage that property or find a property without a flying freehold.

                  Comment


                    #10
                    Originally posted by Dal1 View Post
                    I think the properties were built around 1890-1900.
                    Knowing that and looking at the photos there can be little doubt that the part of the property over the passageway goes with the rest of the property. If I were acting for you I would not find it necessary to report the position to the lender.

                    Comment


                      #11
                      Seems like our solicitor has made up her mind. Waiting for the original deeds from the seller to see if they match with the LN plan

                      Comment


                        #12
                        Hi Lawcruncher,

                        Hope you are well.

                        Are you a solicitor and are you on the panel for FHL?

                        Thanks,

                        Dal Gill

                        Comment


                          #13
                          Originally posted by Dal1 View Post
                          Hope you are well.
                          Not too bad at the moment thank you.

                          Originally posted by Dal1 View Post
                          Are you a solicitor and are you on the panel for FHL?
                          I was a legal executive, now retired and living in Spain.

                          Have you referred your solicitor to this thread?

                          Comment


                            #14
                            Wow Spain, very nice.

                            I haven't referred her to this thread, I'm concerned she might take offence

                            Comment


                              #15
                              What is your position? There is a property you want to buy and there is a strong possibility that you may not be able to buy it through your solicitor's actions. That would be fine if the property had serious title problems which cannot be resolved. The question is therefore whether the property has serious title problems which cannot be resolved.

                              The position your solicitor is taking is at first sight not unreasonable. It is my view however that careful analysis considering the layout and the relevant law shows there is in fact no problem. If your solicitor is telling you there is a problem you are perfectly entitled to ask her to justify her position. If you are going to do that she needs something to think about. This thread will give her something to think about. If she is professional she ought not to be offended, but either robustly defend her position or concede that she had not thought the problem through.

                              Grasp the nettle and refer your solicitor to this thread.

                              Comment

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