Purchase with unregistered leasehold

[emmaliverpool]

Hi, 

 

I have a question I am hoping someone may be able to help with. 

 

I’m looking to purchase a house cash, convert it to an hmo and then mortgage with a hmo mortgage. I’ve just received the below email from my solicitor. 

 

The problem is the leasehold is unregistered and I can not take out indemnity insurance. 
 

Any advice would be greatly appreciated. 

 

Email received from my solicitor: 

 

Hi Emma

Please see below. A you are aware the seller will not provide the statement of truth about the unregistered lease noted on the title as she is executor selling with limited title guarantee.

I then asked the Seller to confirm the following points below which are requirements so we can put an indemnity policy on risk


 1.  The outstanding lease is at least 10 years old
 2.  There has been no communication with any person(s) or organisation that may be entitled to a prior interest arising from the outstanding lease
 3.  There has been no challenge or dispute relating to title

They are again refusing. On that basis you cannot meet the requirements for the indemnity policy.

My advice is that you walk away from this deal as we cannot be certain that no other person has an interest in the property.

If however you are willing to take a risk and want to proceed I am happy to draft a waiver stating that you will not hold this firm responsible in the event that the title to the property is challenged in the future.

Have a think  and let me know how you want to proceed


Kind regards,

[Kerry Chan]

Hi @emmaliverpool

Not sure where you have ended with this deal, but if this deal is still ongoing, have you tried asking the seller to register the leasehold at the Land Registry first?  If this is possible, you could potentially exchange with the condition that a registered leasehold must be in place as a condition precedent for the purchase - the deposit should be held on trust with interest, while the seller sorts this out at the Land Registry.

For the avoidance of doubt, the above (a) does not constitute legal advice (and no lawyer-client relationship is formed in any way) and (b) is set out for your reference only.

Kerry