No lease to be found anywhere. Ground rent demand

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    No lease to be found anywhere. Ground rent demand

    Hello

    We recently bought a leasehold house. (Or at least we bought the rights to occupy it for 982 years)

    The Land Registry entry refers to a 999 year lease from 2004, but no copy of the lease can be found anywhere. Neither of the two previous owners have a copy, the Land Registry although they were in possession of it say it is now lost in their deep storage. The freeholder similarly does not have a copy, nor does the Solictior who handled the conveyancing for the previous purchase/sale.

    The purchase took place with an indemnity policy to cover this.

    Now I have received a ground rent request containing references to sections of the lease document, which can not be found anywhere.

    The freeholders have stated that if I wish for a new lease to be drawn up, I will have to pay the costs for this.

    Any advice? Is demanding ground rent with no copy of the lease in any way enforceable? Should the costs sit with us?

    I am of course not saying that any of this comes as a surprise to us, nor that I believe I have a right to wiggle out of paying the ground rent. I would just like some advice on how to proceed.

    Many thanks!

    #2
    If the freeholder “apparently” does not have a copy of ur lease, ask him how does he know how much ground rent to charge.

    Secondly, let’s say that u do not pay the GR, he initiates proceeds to forfeit ur lease. In the absence of lease, how is he going to justify to the court how much GR is payable?

    One last thing, when leases are held on a very long term like urs, the extension is usually done on “peppercorn” ground rent.

    don’t settle anything, until the freeholder can prove that GR is payable and by how much.

    u also mentioned an indemnity insurance. Would it not cover this?

    Comment


      #3
      Originally posted by Babyspice View Post
      If the freeholder “apparently” does not have a copy of ur lease, ask him how does he know how much ground rent to charge.

      Secondly, let’s say that u do not pay the GR, he initiates proceeds to forfeit ur lease. In the absence of lease, how is he going to justify to the court how much GR is payable?

      One last thing, when leases are held on a very long term like urs, the extension is usually done on “peppercorn” ground rent.

      don’t settle anything, until the freeholder can prove that GR is payable and by how much.

      u also mentioned an indemnity insurance. Would it not cover this?
      I am in no way knowledgeable but my understanding is that an indemnity policy covers you for things like an unknown covenant which might have been covered in the terms of the missing legal document, subsequently being breached, rather than covering the costs to have the document replaced, which was a known cost from the beginning.

      I appreciate I could just wait for the freeholder to commence legal proceedings but my impression is that such a thing often carries with it unpleasant unintended side consequences such as the addition of arbitrary costs, the possibility that a court might not agree with me as I was aware of this situation going into it etc.

      Comment


        #4
        I think u need urgent legal advice (I am not a solicitor).

        my point above still stands. U freeholder needs to prove that GR is payable and due. U have told us that the lease cannot be located/found. In the absence of legal document (which the lease is), how is ur FH going to prove to the court that GR is payable and the amount???

        as I said before, lease extensions on 999 terms, don’t usually carry GR (extensions remove GR). So, maybe in ur situation, there might not be any GR due amd the FH is just trying his luck.

        i would definitely not pay for a new lease to be drafted, especially with such a long lease like yours. But again, check with a solicitor in case they have a different opinion.

        in parallel, I would also suggest u contact LEASE for their opinion/feedback. They might be able to give u some direction.

        Comment


          #5
          Hi. Did your conveyancing solicitor actually advise you to buy a leasehold house with no lease on record?

          How do you know the FH doesn't hold a copy?

          Does the LR title suggest the lease is the original when the premises first sold? An original lease may have been varied, but the LR lists such variations without necessarily saying what they were for unless the term changed and that is pretty obvious. Pay £3 for the FH title extract as this will/should give a schedule of notices of all the leases on the FH and their start date and term end - including your address.

          Also on the LR buy one of the other leases you see in the FH title notice of leases. No law against that.




          Do not read my offerings, based purely on my research or experience as a lessee, as legal advice. If you need legal advice please see a solicitor.

          Comment


            #6
            At 999 years it's unlikely anyone would have chosen to extend and as it's a house there is unlikely to be any other leases on the freehold but your LPE1 enquiries would have told you what the ground rent was so that would have been the time to query the missing lease.
            In the circumstances probably best to purchase the freehold and avoid any hidden surprises.
            How much is the ground rent ?

            Comment


              #7
              Originally posted by NorthWestLL View Post
              the Land Registry although they were in possession of it say it is now lost in their deep storage.
              So the LR say that they do have a copy of the lease but it's in 'deep storage' - in other words it's been archived so it's harder to access.

              Ask them to send Indianna Jones in to dig it out.

              There is a difference between 'we haven't got it', and 'we can't access it easily'. ( ie. We can't be bothered with the trouble of getting it from the archive unless someone pushes for it).

              Comment


                #8
                The free guide to compulsory purchase of freehold title for leasehold houses can be downloaded at LEASE ( www.lease-advice.org ).

                Comment


                  #9
                  Originally posted by NorthWestLL View Post
                  The Land Registry, although they were in possession of it say it is now lost in their deep storage.
                  Is it the case that the following message came up during the search at the land registry:-

                  Documents requiring further investigation
                  These documents may be delivered electronically or by post.


                  If that is the case then it will arrive in about 7 days

                  Out of interest what is the ground rent terms of your neighbours?

                  Comment


                    #10
                    Originally posted by Babyspice View Post
                    If the freeholder “apparently” does not have a copy of ur lease, ask him how does he know how much ground rent to charge.
                    The answer to that is that the amount of the (initial) rent is always shown in the property register of the title.

                    The Land Registry should not be losing documents. They have become obsessed with setting up a completely electronic system doing away with paper and storage. The whole idea of land registration is to have so far as possible a register which sets out what you need to know and is definitive. It works fine with freehold land. However, it is not so good with leasehold land. You cannot make title to leasehold property if the terms of the lease are unknown. For practical reasons the full terms of a lease have never been set out on the register, but at one time you could always get a copy of the lease, though older copies were sometimes barely legible.

                    Of course the original lease should carefully preserved as it is an important document. A lot seem to go missing which has to be unacceptable. The reason can, I think, be attributed to a change in Land Registry practice. Before the Land Registration Act 2002 came into force land and charge certificates were issued. Whilst these were not actually documents of title in the strict sense (in the case of registered land the title is and always has been the register) they were still important as they had to be produced on a dealing. Abolishing the certificates was entirely reasonable, but an unintended result is that since then no one wants to store documents. Lenders do not want them. Conveyancers should either be handing documents to the client (stressing that it is very important to keep them safe) or keeping them in a strong room. What seems to happen is that important documents are left in the file and the file destroyed a few years later without anyone checking what is in it.

                    Counterpart leases are important to landlords and always used to be kept with the title deeds. They are just as likely to astray these days. If a landlord has no counterpart, the LR says it cannot find its copy and the tenant also does not have his lease or a copy, the landlord cannot sue except for rent. He certainly cannot forfeit as he will be unable to prove the lease has a forfeiture clause. It is also difficult to see how a block of flats can be managed if the lease terms are unknown.

                    No one should buy a leasehold flat without knowing its terms. Buying a leasehold house on a 999 year lease is just about acceptable if backed by an indemnity policy and confirmation from the landlord that he does not have a copy. It is not though ideal. It has to be in the interest of both landlord and tenant to know what the terms of the lease are. It is absolutely not the case that a new lease has to be granted. The lease is still valid even if no one knows what its terms are. What is needed is a deed setting out what the lease terms are. Since it is in their common interest landlord and tenant should pay their own costs. On a sale the seller should meet the costs as he cannot show full title.

                    Comment


                      #11
                      Ask the freeholder to send you a copy of the " front page plus page showing the annual ground rent payable" from the 999 years lease in their possession.

                      Comment


                        #12
                        Hi, I overlooked that a leasehold house does not share freehold title with other houses - I was only foolish enough to buy a leasehold flat, never saw the point of leasehold houses.

                        However, my cunning plan mat still have merit? Your house address on the LR will, I imagine, list a freehold tenure title and a leasehold tenure title, no? The extracts for these are £3 each. The FH title extract, I imagine, lists the lease showing the start date and end date. The leasehold title will show a wee bit more but as you say the LR has mislaid the lease copy itself. Here's plan B...

                        Is your house identical to neighbours' houses? Do their LR addresses also list a FH and leasehold tenure title? Pay £3 each for a sample and check the start/end dates. If the other houses have leases that started at the same time as your house, and look like they were built at the same time - council research should answer that - go back to LR and buy one/two of those leases. Not expensive. Look for the GR provisions.

                        No idea if this would stand up on court. Greater minds here. Personally I wouldn't bet my home on the FH'er not having evidence to back up their GR demand and by the time a court agrees you would have a legal bill.

                        I don't understand how indemnity insurance compensates for no lease given this situation, but at least we chickens have the Government looking after our rights so that's reassuring.
                        Do not read my offerings, based purely on my research or experience as a lessee, as legal advice. If you need legal advice please see a solicitor.

                        Comment


                          #13
                          Thank you so much everyone for your thoughts.

                          Originally posted by Babyspice View Post
                          in parallel, I would also suggest u contact LEASE for their opinion/feedback. They might be able to give u some direction.
                          I did contact lease but I have to say the initial 15 minute consultation was not very useful. The operator did not seem very knowledgeable. She first said I needed to go to the county court to have them formalise that the lease was missing but was unable to explain what this meant. She then said that I was bound to pay the £150 per year lease as I was aware of this when I purchased the house. If I'm honest it sounded like she was shooting from the hip on a matter that she did not know about and just hoping the free 15 minute consultation would end as the query was slightly out of the norm.

                          I followed up via their messaging system to confirm what their advice was, but they have not yet replied.

                          Hi. Did your conveyancing solicitor actually advise you to buy a leasehold house with no lease on record?
                          They didn't advise me to buy or not buy the house. They said that this has happened before and did not seem too concerned about it and that the usual way of dealing with it was via an indemnity policy.

                          How do you know the FH doesn't hold a copy?
                          They have told me that they don't hold a copy, I phoned them. They say if I want a new one drawing up then I would have to pay for that, which seems odd to me. I think they should pay as presumably they need that document to prove what I owe them?

                          So the LR say that they do have a copy of the lease but it's in 'deep storage' - in other words it's been archived so it's harder to access.
                          No they said it was sent to deep storage and is now lost, having been misplaced once it was sent there. On the occasions they have requested it be recovered it is not in the file.

                          The answer to that is that the amount of the (initial) rent is always shown in the property register of the title.
                          I have requested all of the titles associated with the property from the LR and none of them refer to an annual lease cost/payment

                          Is your house identical to neighbours' houses? Do their LR addresses also list a FH and leasehold tenure title? Pay £3 each for a sample and check the start/end dates. If the other houses have leases that started at the same time as your house, and look like they were built at the same time - council research should answer that - go back to LR and buy one/two of those leases. Not expensive. Look for the GR provisions.
                          Yes I think this has some value for us to do as it is at least likely to show us what our lease would look like, but it still remains that the actual lease has been lost and there will be a cost to have it drawn up again, even if it closely mirrors the neighbours property.

                          In the circumstances probably best to purchase the freehold and avoid any hidden surprises.
                          Is it possible to purchase the freehold if the lease has been lost? Apologies for the naive question.

                          My aim in this really is to ascertain

                          1) Are demands for ground rent really enforceable without a copy of the lease, I would have thought not
                          2) Can/should the freeholder force me to pay to have a new lease drawn up? I would rather they pay for the new lease to be drawn up and feel it is in their interest to do so as it supports their demands for ground rent.
                          3) Will my ability to purchase the FH be affected by the missing lease? We would like to purchase the freehold as soon as possible and have enquired with the freeholder about this.


                          Comment


                            #14
                            I have requested all of the titles associated with the property from the LR and none of them refer to an annual lease cost/payment
                            What does the title to your lease say? In Section A "property register" there should be brief details of the lease. It is a while since I have seen a leasehold title, but from memory I thought it always gave the initial rent. I am finding it difficult to believe that your solicitor let you buy a lease without knowing what the rent is.

                            They said that this has happened before and did not seem too concerned about it and that the usual way of dealing with it was via an indemnity policy.
                            That sounds all a bit too complacent.

                            1) Are demands for ground rent really enforceable without a copy of the lease, I would have thought not
                            If I am wrong that the rent is not set out on the register I would have to agree. I suppose thought the landlord could though produce his records to show what he has collected.

                            2) Can/should the freeholder force me to pay to have a new lease drawn up? I would rather they pay for the new lease to be drawn up and feel it is in their interest to do so as it supports their demands for ground rent.
                            There is no doubt that your title is secure as it is registered. They cannot force you to have a new lease because you do not need one. Whoever wants to establish the terms can apply to the court, though how the court will decide I do not know. If the house is on an estate where lots of the houses were sold on identical leases the court might impose the terms of those leases. If there is such an estate the way forward is to agree that your lease is on those terms - assuming of course they are satisfactory. As I said above, each party should pay its own costs.

                            3) Will my ability to purchase the FH be affected by the missing lease? We would like to purchase the freehold as soon as possible and have enquired with the freeholder about this.
                            I shouldn't think so. Evidence that you are the tenant is the register at the Land Registry. There is though the snag that you cannot show what the rent is if it is not on the register.

                            Given the number of lawyers who must have dealt with the property at least one should have a copy of the lease. The Land Registry should also be pressed.

                            Comment


                              #15
                              Originally posted by Lawcruncher View Post

                              What does the title to your lease say? In Section A "property register" there should be brief details of the lease. It is a while since I have seen a leasehold title, but from memory I thought it always gave the initial rent. I am finding it difficult to believe that your solicitor let you buy a lease without knowing what the rent is.
                              In section A, short details of the lease it says:

                              The date of the lease, The term, the parties, and then it says "Note: No copy of the lease referred to is held by the land registry"

                              The rent amount was known, in so far as the previous owner told us what the rent was. The current freeholders have the amount and collection periods listed on their own systems (so they can generate automated ground rent notices) and they have been collecting the ground rent for the past 16 years from the previous 2 owners of the property, they just don't have a copy of the lease

                              Originally posted by Lawcruncher View Post

                              That sounds all a bit too complacent.

                              If I am wrong that the rent is not set out on the register I would have to agree. I suppose thought the landlord could though produce his records to show what he has collected.

                              There is no doubt that your title is secure as it is registered. They cannot force you to have a new lease because you do not need one. Whoever wants to establish the terms can apply to the court, though how the court will decide I do not know. If the house is on an estate where lots of the houses were sold on identical leases the court might impose the terms of those leases. If there is such an estate the way forward is to agree that your lease is on those terms - assuming of course they are satisfactory. As I said above, each party should pay its own costs.

                              I shouldn't think so. Evidence that you are the tenant is the register at the Land Registry. There is though the snag that you cannot show what the rent is if it is not on the register.

                              Given the number of lawyers who must have dealt with the property at least one should have a copy of the lease. The Land Registry should also be pressed.
                              The property is a converted barn, on a development of 4 similar buildings, converted in 2005 and only passing through two solicitors/lawyers hands since (as it has only had two owners before us since it was converted). The last sale of our property happened in 2015, by which point the lease was already lost. I did track down the solicitors who acted for the original owner in the first purchase in 2005, but they have destroyed that file due to the time elapsed.

                              I have just requested a copy of the register for one of the other 4 properties and I do not see the same text on their title relating to the lease not being held, so this at least gives me a starting point.



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