Absentee Freeholder – What Can You Do?
As you, probably know, I offer a Telephone Consultation Service, which includes the option of a quick 15 minute chat to discuss any particular leasehold issue that you may be facing. These 15 minute calls are a great source of questions that I can answer on my blog and, therefore, help anyone facing a similar situation. This week, I was asked what could be done about an Absentee Freeholder. This was my reply;
I hope you found our chat useful. I just wanted to recap and confirm what I thought you should do.
You told me your lease is for a term of 999 years from 1852 … and your freeholder is not registered in the on-line section of HM Land Registry. This is causing concern because you want to carry out works to the property – but because your lease says you must not alter the property, you are worried a freeholder may subsequently turn up … you’d be in breach of the terms of your lease and a legal battle might arise. You would therefore like to buy the freehold, so this concern disappears.
So, what do you do?
I would suggest the first step would be to double-check the freeholder situation at HM Land Registry. As you’ve tried and failed ‘online’ (which is not surprising if nothing has happened/changed since 1852), it doesn’t necessarily follow that you do have an absentee freeholder but you’re going to have to ask for a manual search.
To do this, you need to use form OC1 for this > http://www.landregistry.gov.uk/_media/downloads/forms/OC1.pdf. When completing the form, under section 2b you need to tick freehold … as that’s the title you’re interested in … but in the blank space to the left, I’d hand write “freehold connected to title number ****” and add your leasehold title number. HM Land Registry will be able to identify the building from your leasehold title and hopefully this will aid the manual search through the non-computerised dusty records.
It may take a few weeks for HM Land Registry to reply. When they do, you’ll one of three answers:
1. The freeholder is a named person, an individual
2. The freeholder is a company
3. There is no record of the freeholder.
If the freeholder is a named individual, the next step is to try and find that individual. How we do that depends upon who and when. If it’s John Smith and the entry is dated 1852 – there’s probably little chance of tracing him or his ancestors. There are many John Smith’s, he will not be living after all these years, and tracing ancestors with a Smith surname will take forever. On the other hand if his name is Richard Branson and his address was recorded in say 1990 – there may be more chance of success … but it will still be hard work.
If the freeholder is a company, hopefully that company will be recorded at Companies House. So the next thing to do is a search of the Companies House database > http://www.companieshouse.gov.uk/ Again, the information may be useful or not so useful. If nothing else, you’ll have an address to write to or visit – or you may have an Official Receiver or Liquidator to contact, if the company has ceased trading. OR you may see the company has been dissolved – in which case save that information safely and read on.
If there is no record of the freeholder – or if the company has ceased to exist … or there is credible evidence the person has died and no traceable ancestors can be found – your next step is to contact the Treasury Solicitor > https://www.gov.uk/government/organisations/treasury-solicitor-s-department If you’d read my Leasehold Ebook (https://www.berniewales.co.uk/leasehold-an-owner-occupiers-and-buy-to-let-investors-guide/) you’d know that all land which is not owned by someone else, is owned … or reverts to … the Crown. The Treasury Solicitor handles the legal affairs of the Crown … and in these particular circumstances, it’s the Bona Vacantia department you need to speak to. You can email them at email@example.com or telephone 020 7210 4700 and press option 1.
Depending upon the precise circumstances, I suspect you’ll end up here > https://www.gov.uk/refer-bona-vacantia-land-or-buildings-bvc2 and you’ll apply to the Treasury Solicitor to buy the freehold – or if necessary, you could serve a “Right to Enfranchise” claim as a leaseholder exercising your ‘right to buy’ the freehold. There will be a valuation process to go through, but the freehold value for a property with leases having 800+ years unexpired will be quite small (depending on the ground rent payable) … and you’ll have to pay their reasonable legal costs et cetera.
At the end of what probably seems a long and complicated process, you’ll have bought the freehold. You could then dissolve your existing lease(s) and start afresh … but precisely what you do will depend upon the current use and requirements for the property – and that’s a whole other story.
Best wishes. Do let me know if you need help – and let me know how you get on in any event.
A little while later, I received the following response;
Thank you very much for this. It is informative and very good education for me. I was informed by a few “experts” that if you could not locate the freeholder then you could not buy the freehold.
In the last few days we have agreed a sale price which is giving us a tidy profit, therefore, we may not need to purchase the freehold on this one, but it could fall through. And it is very good knowledge for future purchases/conversions.
Once again, thank you and I shall keep you posted on how things develop.
Whilst the information may not end up being used, on this occasion, it’s good to know the process that needs to be followed in circumstances such as this.
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