Breach of lease help

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    Breach of lease help

    Happy new year to you all.

    Mine hasn't started so well, unfortunately.

    2years ago we converted a large flat into two smaller flats. Assuming we'd obtained the correct permission from the freeholder.
    Fast forward 8 months, they'd been completed and signed off with all their correct certificates etc... and we have a buyer. The buyers solicitor had requested the lease pack, which is where we'd discovered we hadn't actually had the freeholders permission. Fast forward another year and two lost buyers, we've been found in breach of lease.
    We'd received a letter from our freeholders solicitor in September 2017 explaining the breach and what our steps forward were to be. In essence we'd agreed to the breach and agreed to pay all costs and a premium to the freeholder. In return they would draw up the new leases and all would be well.
    They'd allowed us until December 2017 to pay and agreed after the sale of one of the flats we could pay them due to the sheer cost of their 'premium'. We'd found another buyer, who was a cash buyer and could move swiftly.
    They were aware of this and also the December deadline they'd set and said they were working on the new deeds, they had all the information they needed to complete the deeds and we'd been in contact with their solicitors regularly to 'push' them along. All their solicitors had told us were that the freeholders were drawing up the leases. Our solicitor wrote to them beginning of Dec to notify them of the deadline to pay and they'd said they would move it.
    Fast forward to now January 2018 they still have not drawn the leases up, they haven't confirmed the movement of the deadline either. Our buyer has pulled out (who could blame her) even though we'd reduced the sales price by 15% and offered to pay for her storage costs.
    Our solicitor has told us that as we were in breach there is nothing we can do and they can't push or force the freeholders..she also said she'd not dealt with this kind of issue and doesn't know any one who had...
    I find it difficult to believe it's a rare case and wondered if anyone has any insight, knowledge or advice..

    thank you


    #2
    My advice?

    Get all your paperwork in order before you do any building in future.

    Comment


      #3
      Thank you for your sound advice for the future. Do you have anything helpful for the situation I find myself in now?

      Comment


        #4
        Be very grateful that freeholder is even playing ball as much as they are. They could have required you to reinstate everything back as it was to allow you to sell on.

        Comment


          #5
          I am grateful, and also grateful they're allowing us to sell one first before we pay them. Just wondered what we could do or are allowed to do to hurry up the process so that they receive their money and we can move on.

          Comment


            #6
            I am not sure if this would be acceptable in legal protocol. However my experience is that with most of life's problems is the answer lies in respectful and clear communication. Is it possible for you to speak directly with the freeholder. On the basis it would be better for both of you to settle the issue as quickly as possible with the minimum going to the legal profession.

            Comment


              #7
              I would love to be able to handle it this way, however..... As soon as we were in breach of lease, our management company..(who we believe are the freeholders) stopped sending bills. We fell into arrears as they hadn't issued our management bills to be paid..(and won't tell us the outstanding amounts). This has then led them to 'not be able to deal with us' as were in arrears. Our only communication port is through our solicitor, then theirs to the freeholder.
              I've no idea how to contact them directly.

              Comment


                #8
                Sounds like their position is that you are not in arrears because you don't have a lease! They are setting up the conditions to allow them to forfeit the lease. The courts are unlikely to actually forfeit the lease as long as you do your best to rectify the breach. Setting up to forfeit the lease typically makes it easier to recover enforcement costs from you, and that is probably the only reason they are doing it.

                Also, did you get building control consent? I assume splitting the flat would remove all the grand fathering, and require you to bring the flats up to current standards?

                Did you get planning permission? A change of use from one to two flats will require that, I believe.

                Have you registered the new flat for council tax (and had the remaining one revalued)?

                Comment


                  #9
                  Thank you, they haven't asked us to rectify the breach, they've asked that we pay a premium for retrospective permission. Theyd sent us a letter from their solicitor asking that we accept were in breach, asking that we pay all costs, and asking that we pay their premium. We've accepted all these conditions on the understanding that they'll receive payment when the first flat is sold. They agreed and then started to draw up the new leases I order to allow us to proceed with the sale.. It's just taken 5 months so far and we've lost three buyers..

                  We obtained all the correct permissions before works started and we were of the understanding that the freeholder had given us permission too. But all we'd done was paid and applied for permission, just had never got a reply either way. Which wasn't discovered until the solicitor requested the leases. They've been registered and revalued too.

                  Comment


                    #10
                    Has anyone experienced this from a freeholder?

                    Comment


                      #11
                      Originally posted by leaseholder64 View Post
                      Sounds like their position is that you are not in arrears because you don't have a lease! They are setting up the conditions to allow them to forfeit the lease. The courts are unlikely to actually forfeit the lease as long as you do your best to rectify the breach. Setting up to forfeit the lease typically makes it easier to recover enforcement costs from you, and that is probably the only reason they are doing it.

                      Also, did you get building control consent? I assume splitting the flat would remove all the grand fathering, and require you to bring the flats up to current standards?

                      Did you get planning permission? A change of use from one to two flats will require that, I believe.

                      Have you registered the new flat for council tax (and had the remaining one revalued)?
                      Yes I agree..but dont let this worry you..if they havnt sent bills then you dont owe anything...although this is minor compared to the main issue here. But I doubt they could actually forfeit the lease IF an agreement was made to rectify it as you have done (but Id get legal clarification on this point).

                      The FH really should inform you you are in breach and ask you to rectify (and pay costs), I cant see any logic in him doing nothing.
                      Advice given is based on my experience representing myself as a leaseholder both in the County Court and at Leasehold Valuation Tribunals.

                      I do not accept any liability to you in relation to the advice given.

                      It is always recommended you seek further advice from a solicitor or legal expert.

                      Always read your lease first, it is the legally binding contract between leaseholder and freeholder.

                      Comment


                        #12
                        Originally posted by Mellifluous View Post
                        Has anyone experienced this from a freeholder?
                        There are a few similar threads where LHs are waiting on FHs for various things and its holding up a sale but Im afraid I dont really know what pressure can be bought to bear on the FH..at first glance, it looks like none.
                        Advice given is based on my experience representing myself as a leaseholder both in the County Court and at Leasehold Valuation Tribunals.

                        I do not accept any liability to you in relation to the advice given.

                        It is always recommended you seek further advice from a solicitor or legal expert.

                        Always read your lease first, it is the legally binding contract between leaseholder and freeholder.

                        Comment


                          #13
                          Thank you, our solicitor says there's nothing we can do and there isn't a governing body over freeholders who can tell them what their timeframe is for certain things. It's very frustrating and costing heaps of money. Does anyone know if this sale falls through..are we allowed to rent the property?

                          Comment


                            #14
                            If you need permission to sub-let, I predict that requests for permission will go without reply.

                            Most leases require that you do not sub-let in part, so you would need to rent both flats to the the same person, and they would not be able to split them.

                            Given that they could theoretically forfeit the lease, sub-letting may not be advisable, even if within the terms of the lease.

                            Comment


                              #15
                              Under the leasehold system , the property belongs to the freeholder and the leaseholder is only a long term rental tenant.

                              The leaseholder as tenant does not own the property and has no legal right to divide the flat into 2 separate units and sell off.

                              Comment

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