Absentee landlord?

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    Absentee landlord?

    I am in the process of buying a flat with a share of the FH but the FH was never transferred into the current owners name. The lease is quite short which wouldn't normally be a problem if you had a share of the FH as I would only pay the legal fee to extend up to 999 years or similar.

    The problem is the solicitors cant find the current owner of the share of the FH who was the previous owner.

    I have been advised if I go ahead and buy I could end up with a property impossible or very hard to sell at a later date if it doesn't get resolved now before exchange. I really don't want to lose this property for a number of reasons.

    I am concerned the vendor will pull out if it drags on too long.

    If I went ahead took a gamble and brought it, hopefully the situation is resolved but if not could I go down the absentee landlord route to extend the lease? I know nothing about absentee landlords but there must be some provisions for LH. If so guess I could end up paying the normal premium price to extend the lease and if so that would be the worst scenario.

    Any thoughs

    #2
    First of all, there's no such thing as a "share of freehold" and you would find this out would you have bothered to read any of the stickies on this forum before asking.

    Who owns the freehold and I presume the freehold is for the block of which you want to buy a flat? Is it a number of people or a company whose shares are held by a number of people? Or is it only one person?

    The answer will depend on this.

    Comment


      #3
      I am fully aware there "there's no such thing as a "share of freehold"" but I was using the commonly used term for I thought for simplicity. I will now refer to it as an "interest in the freehold" as not to offend.

      My understanding of the situation is the FH is held in trust by 4 of the 12 LH as trustees and the other 8 LH are beneficiaries. The current leaseholder of the flat I wish to buy never had the beneficiary or trustee rights (not sure at this stage if he was a beneficiary or trustee) transferred into his name when he brought the flat due to a cock-up by the solicitor. It has only now been noticed a few years later and the solicitors are having trouble tracking down the previous owner to resolve the issue.

      My question is can the absentee landlord route be used to extend the lease if the missing person cant be found. Long shot I know

      It has been mentioned that the property will be virtually unsellable in the future if I buy (cash) as it is, as the lease only has 60ish years left now but surely there must be a way to extend a lease in this situation if the previous LH with "interest in the freehold" cant be found?

      Comment


        #4
        There is no question of offence it is just daft, and as you will see highly misleading, to refer to something that doesn't exist rather than express it as, in this case "they or their company own the freehold".
        The problem is the solicitors cant find the current owner of the share of the FH who was the previous owner.
        Which means that the above search is a non sequitor you cannot find that which does not exist.

        it is misleading in this case as the vendors own nothing other than the lease that you will purchase. its length therefore the only thing that matters to you and your mortgage as it affects the price and the loan.

        The freehold is owned by a trust, controlled with 4 trustees Ts and 12 beneficiaries Bs, none of whom own anything. it is therefore not absent simply a question of who the Ts and B s are.

        The declaration of trust or trust deed is therefore critical as it will deal with how the beneficial interests are handled, from being automatic on sale and purchase of a flat, or by a distinct declaration that Vendor is replaced by Purchaser.

        it is that which the solicitor need to locate or you ask the V or neighbor "Are you or do you know who the trustees are?" if they are getting and paying service charge or ground rent bills then the name and location of the trust and trustees must be on those bills under the LTA 1987.

        So I hope you see my point the share of freehold is in general and in this case a lot of nonsense that has only confused you and your solicitor. This should get you on the right track.

        When in turn you come to sell you can say to buyer and agents

        "we are selling a lease of X years and the residents own the freehold though a trust"- and to the lawyers the afroegoing and "the T's are.... and all 12 flat owners are the beneficiaries".
        Based on the information posted, I offer my thoughts.Any action you then take is your liability. While commending individual effort, there is no substitute for a thorough review of documents and facts by paid for professional advisers.

        Comment


          #5
          Thanks for that.

          So the details of the declaration of trust or trust deed is the key and if I understand you, if it's automatic it isn't a problem but if it needs a declaration by the missing previous "beneficiary" that where the problem lies.

          If that is the case what options are open to me to resolve the issue if the missing beneficiary can not be found? Is it fixable?

          Comment


            #6
            Yes thats right you need the DoT. In the latter case the DoT should have the mechanics to make the change, but it depends on the wording.
            Based on the information posted, I offer my thoughts.Any action you then take is your liability. While commending individual effort, there is no substitute for a thorough review of documents and facts by paid for professional advisers.

            Comment


              #7
              Originally posted by johnboy View Post
              The lease is quite short which wouldn't normally be a problem if you had a share of the FH as I would only pay the legal fee to extend up to 999 years or similar.
              Incorrect - the Company has the right to charge you the full premium plus their solicitor and surveyors fees for the lease extension. At 60 years it is going to be expensive. Do not assume that they will grant you one for free.

              Comment


                #8
                In this case it is a trust but the same applies,. it is another reason why share of freehold should be expunged for the vocabulary as it misleads people into thinking lease length is irrelevant.]

                With the T and B issue it might be that by mistake or omission or intention the original Bs may not be required to cease being a B on their sale of their flat and will get a windfall when leases are extended, especially as even if the intention was to avoid this issue by buying the freehold, it is another thing to say that that right or benefit is transferred to a subsequent owner, unless the paperwork or records indicate that too should happen.

                By properly expressing ownership these issues are avoided
                Based on the information posted, I offer my thoughts.Any action you then take is your liability. While commending individual effort, there is no substitute for a thorough review of documents and facts by paid for professional advisers.

                Comment

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