Land Tenure - Leasehold/Freehold/Commonhold Flashcards
Buying freehold of a flat
Must be qualifying tenants
Original lease on flat more than 21 years
Building must have more than 2 flats
At least 2/3 of flats must have leases which were granted originally for more than 21 years
No more than 25% of internal floor area must be non-residential
At least 50% of leaseholders in block must agree to participate. Those who don’t can agree a lease with new freeholders
Freehold - Estate in fee simple absolute in possession
“Fee Simple” = Right for property to be inherited
“Absolute” = No limits or conditions on ownership
“In possession” = immediate entitlement
Freeholder owns the land, but may be restricted by existing covenants/easements
Leasehold Estate
RIghts over land for a specific period.
“Term of years absolute”
“Term of years” = Specified period
“Absolute” = Ownership is unconditional, can pass to the leaseholders heirs
If the lease when created exceeds 21 years, the leaseholder may have statutory rights to buy the freehold
Extending the lease (Leasehold Properties)
If you’ve held lease for more than 2 years
Can buy a new lease running for 90 years from end of CURRENT lease
Landlord not able to refuse an application to extend, the cost to leaseholder must be “FAIR VALUE” based on open market values
Leaseholders cannot purcahse the freehold if:
It is a converted property with 4 flats or less
The same person has held the freehold since before the conversion and has lived in one of the flats as main residence in the past 12 months.
More than 25% of the building’s internal floor areas is for commercial use
Property Register
Details of land
Title number
Plan of property
Beneficial easements
Proprietorship Register
Name and address of estate and owner
Absolute Title: Clear title to the property is established. Includes both FREEHOLD and LEASEHOLD where good title can be shown and lease was for at least 21 years.
Good Leasehold: Applies only with leases of 7 years or more, but freeholder’s title may not be absolute
Possessory Title: Title deeds are missing or someone else occupies the land under squatter’s rights (adverse possession) Where possessory title is held - it can be converted to absolute title once it has been held for 12 YEARS
Qualified title = very rare - occurs when there is some defect in the title
Charges Register
Records any charges over the property
Mortgagee’s interests (the lender)
Spouse’s intreest notifiable under Family Law Act 1996
Details of negative easements and covenants
Unregistered Land
When unregistered property is transferred or where a lease exceeding 7 years is granted, it must now be reigstered as “FIRST REGISTRATION OF TITLE”
Application must be within 2 months of the transfer
More difficult for conveyancer to establish good title when unregistered land is sold. Search over last 15 years of property history has to be undertaken - known as establishing the “Root of Title”
Chancel Repair Liability
Exists for some property owners in England and Wales to fund repairs to the chancel of their local church
Chancel Repair Liability Insurance
Property owner can take out insurance cover which will cover costs of any repairs should the liability not have been known about.
Title Guarantees
Full Title Guarantee = Establishes the property is free from charges and encumbrances. Vendor is selling free from any charges and from any rights which could be exercised by third parties.
Limited Title Guarantee = Vendor states that he has not created any new charges or encumbrances over the property.
Matrimonial Interests (Family Law Act 1996)
A non-owning spouse/civil partner can register an interest by a formal entry in the Charges Register and preventing their spouse from selling the property.
Lender will want any non-owning spouse or adult children to sign a “CONSENT-TO-MORTGAGE” form waiving their rights of residence
