problem with the lease-help!

[VannaB]

I'm nearly at the exchange of contracts stage selling my flat and buying a house. However there is now an issue with the lease that my buyers solicitor flagged up. Something to do with us supposedly having to share buildings insurance and yet at present we do our own and have obviously never read the lease properly or misread it (yet cover each others flats-there are only 2 flats in total).

The landlord is apparently untracable and now my solicitor says they are applying for a deed of retrification (although maybe its a typo and could be Ratification or Rectification?)


My questions are-what is this deed? How easy is it to obtain and is this a serious issue that may cause delays or even the collapse of my sale? I'm frantic with worry! I don't know what is happening! Please advise if you can

Many thanks

[Nether Edge]

If lease is defctive, it can be rectified by current L and T.

The alternative, as a stopgap, is indemnity insurance. For a one-off premium (which you, as T, would have to pay), insurer covers each successive T against costs or loss. Your sol. can explain and obtain quotaions.

Like Corporal Jones advised, "Don't panic!"

[Law Student]

Nether Edge,

I agree with the above, but I have two (largely academic) questions:

(a) what can be done re rectification where L is missing?

(b) Where reassignment requires L's consent, what can be done where L is missing?

This isn't a test; I genuinely have no idea!


LS

[MustafaTickl]

Presumably under the lease it was for the landlord to effect building insurance but as he is uncontactable it is not known whether he has or not and the lease does not say what happens in this circumstance. So a Deed of Rectification is required to permit the leaseholders themselves to purchase the necessary insurance. "Deed of Rectification" is a grand name, but it only means legal variation of the lease. If the landlord remains uncontactable then a unilateral application by Vanna's solicitors for a variation of the lease to the Land Registry to permit the purchase of building insurance by the tenants under suitable conditions is almost certain to succeed. However, if it is opposed or complicated then it may have to be decided by a hearing within the Land Registry or go to a Court for an Order. If it is accepted as straightforward by the Land Registry it will cost �300 - �500 altogether and take 4 - 6 weeks. If it goes to a hearing within the Land Registry or to a Court it will take several months and cost at the very least �2000.

[VannaB]

wow

Lots of stuff to take in! Aren't you all knowledgeable? Thanks

Have been 'talked down' from mega panic by solicitors assistant who has instructed me to get drunk over the weekend.

[Nether Edge]

VannaB: this is "being called to the bar". Are you yet sober as a judge?

[VannaB]

Am totally sober as a judge now. The drink didn't work!!!!!
Today I had to cancel Friday's removal firm and arrange to have all new furniture which is being delivered later on in week to new home, sent to storage facility. Cancelled day off work I'd scheduled to move, much to the delight of my much hated and evil boss who loves the fact this is all going wrong for me.
Solictitors said they'd try a contact number for landlord today but as they've not been in touch since, I guess this means they had no luck. Sadly I am in panic/despondant mood now. Have packed boxes all over flat. The thought of a 6 week delay horrifies me, sob!
Solicitor had said that buyers solicitor wants us to hire conveyancing equivelant of a Private Detective to track landlord down if tracing him fails. I'm guessing this is expensive AND lengthy!

[VannaB]

Latest update:

I looked in phone book and found 1 name that matched ;landlords-rang it & it was his mum who gave me his number. Solicitor has now gotten his permission to sign over to me the freehold. Do we still need to do Deed of Rectificaion or will me having Freehold sort all problems out?

[MustafaTickl]

When you have the freehold a Deed of Rectification will not be necessary.

You will then have to decide what to do, probably the best thing being to open a management company, vest the freehold in the management company, issue one share to your flat and one to the other, appoint a board being one person from other flat and one from yours plus a secretary, management company then to issue new 99 year leases to each flat and then sell your flat with a new 99 year lease plus a share of the freehold.

[VannaB]

Will that take long? It sounds complicated. Can my solicitor do it quickly?
Also, is it possible to sell with the freehold given to me (buthavingnot done what you just said) and then the buyer sorts all that out when she moves in? WOuld that be possible and if so would I need one of those indemnity insurance policies?

I will NEVER buy a flat again! Nightmare!

Thanks for your advice so far

[MustafaTickl]

It sounds complicated, but it isn't really to those who are familiar with the matter. Most of it can be done on standard forms and the whole thing can be established in 7 - 10 days. Of course you can sell your flat together with the freehold of the whole house if you want, and the other person's lease would then have to be transferred to the new freeholder. However, this also makes the purchaser of your flat, the freeholder, solely responsible for the building insurance, maintainance of common parts, maintainance of the external parts (foundations, walls, drains, gas, electricity, roof etc) with only the income from the lease to pay for it. You might find that nobody wants such total and sole responsibility and far from it being a benefit you may have to drop your price, That is why I suggested splitting the responsibility of the freehold and selling with a share of the freehold. That way I'm sure that you will be able to increase your price a little. Or of course you can retain the freehold, sell your flat on a lease, and go into the property management business managing the two flats !! But I don't advise it, it can become an awful pain with the potential to lose money.