Morning all,

Last week I had an offer accepted on a lovely detached house in Sheffield. All good until I visit said house for a nose around and bump into the neighbour who claims they have no idea who owns the freehold of their identical property (several hundred year lease, which is very normal in this area).

Having looked into this I’m led to believe it can be a little problematic. I’ve been told that the sellers will need to take out an indemnity insurance policy in case a landlord resurfaces. However, I cannot help but feel this just makes the house less sellable.

Having looked on the land registry I found the company who owned freehold but has since been dissolved. I emailed the Bona Vacantia department of the government who say the land probably falls under their jurisdiction but were generally pretty unhelpful, just sending me links to their online guidance.

Very hesitant to proceed now given this has come to light, mainly because I worry I won’t be able to sell in future…

Anyone have any similar experiences who can offer advice…? I have the estate agents hounding me although I think they should have told me this prior to me making an offer.

Cheers,

R

A lot will depend on whether your bank will lend you the money or not. If you have dramas then a future buyer will have similar dramas.

I have the estate agents hounding me although I think they should have told me this prior to me making an offer.

I wouldn’t worry about the estate agents. Your offer is not binding. tell them to do one.

Very hesitant to proceed now given this has come to light, mainly because I worry I won’t be able to sell in future…

if it’s a worry to you, then it will probably be a worry for anyone who may looking to buy when you are selling.

Legally I have no idea where you stand, although as long as you have hundreds of years on the lease, I think you would be fine even if the freeholder turned up. Have you spoke with a property lawyer?

If it was me, I would either walk away or reduce my offer to reflect what I thought this matter affected the value.

Would you have made an offer if you had been aware of this before hand?

A house is only worth what someone is willing to pay.

Ask your mortgage company if they are willing to lend on it and ask your solicitor that you’re using to purchase what they reckon?
I say proceed if both say no problems.. Although you could probably try to reduce your offer by the cost of the indemnity insurance.

Thanks folks. I did speak to a solicitor who said this scenario can open up a can of worms but that mortgaging with most bank will be ok with insurance (typically paid by seller…)

I think you can force a freehold purchase now. I had a freeholder who did not want to sell but we took him to the tribunal who valued the freehold and we bought it.

It did take ages tho, and I actually think he bottled it just before the adjudication. I know your problem is different as you don’t know who to negotiate with.

The freehold purchase was not much so I would research more if you really want the house.

You’ve no right to purchase the freehold initially (enfranchisement) but the outgoing seller may have; it could be something that they take on prior to exchange if they’re desperate to sell.

Alternatively, you can make an application for the crown to disclaim their interest in the freehold. I haven’t done one in quite a while but last I did, Farrah & Co were the solicitors that acted on behalf of the crown. Be prepared to pay a sum for the freehold AND their costs. I’d consider reducing my offer in line with the same.

As your solicitor says, there is no drama and the risk is insurable but a lay person buying a home is not often in a position to assess the risk so your eventual buyer will be just as worried as you are now.

We had this on our first property and took out an indemnity insurance policy (it was the top floor maisonette of a 2-storey house).

Initially we were quite concerned but we had no problems and sold the property on with no problems at a later date.

Sounds dodgy to me. I’d sack it off and buy this lovely house in Sheffield (which happens to be freehold) instead 😉