Lease extensions where you can’t track down your freeholder are more complicated. Why?
Many mortgage lenders simply refuse to lend money is on any leasehold properties with an absentee freeholder – which can obviously seriously affect the chances of a leaseholder in obtaining a mortgage or even marketing the property. This problem is made worse if the remaining lease term itself is relatively short.
It is likely to prove expensive, complex and lengthy to serve a statutory notice enforcing a lease extension if there is no freeholder or their whereabouts is unknown. In the Leasehold Reform (Housing & Urban Development) Act 1993, provision was made for dealing with the problem of freeholder absenteeism by applying for what is known as a Vesting Order through the County Court, which also has the power to grant a dispensation from the requirement to serve notice entirely.
What is a vesting order?
Any leaseholder seeking to extend their lease or group of leaseholders seeking to purchase the freehold of their block or claim the right to manage it, must produce evidence demonstrating reasonable efforts have been made to trace the absent freeholder before a Vesting Order can be granted. Admissible evidence to bruises includes providing freehold Office Copies (i.e. Proof of the freeholder’s ownership) showing the last known address of the freeholder, proving they no longer own that property and have moved to an unknown address, or providing statements confirming that a visit to the freeholder’s last known address has not provided the leaseholders with a forwarding address.
The County Court will either set a date for the Vesting Order hearing or, alternatively, rule on the basis of the presented facts if the judge is satisfied that reasonable efforts to trace the freeholder have been made. When your case has been proved, the Court will issue a Judgment setting out that the freehold may be acquired by the leaseholder(s) with funds to be ‘vested’ in the Court and defer the case to the First Tier Property Tribunal [which replaced the old Leasehold Valuation Tribunal or LVT in July 2013] for a ‘reasonable’ premium, in case the freeholder resurfaces in the future.
Vesting orders – is a hearing always necessary?
The First Tier Property Tribunal also hears many absentee freeholder cases without a full hearing by issuing directions for the leaseholders to comply with and timescales for documents to be produced by, such as the County Court Judgment, copy leases, the valuation for the leaseholders and the proposed TP1 land transfer form.
Whilst the leaseholder may, following grant of a Vesting Order, benefit from acquiring the freehold at a relatively low premium and then grant themselves a lease extension for a nominal premium, the procedure, legal costs and sheer aggravation involved could still be significant. Instruct our team of lease extension, right to manage and enfranchisement experts today who will be able to guide you through this complex process and help eliminate the worry from what can be a stressful situation.
Problems with an Absentee Freeholder? Looking for a specialist Lease Extension Law Firm?
Wherever you live nationwide, if you’re thinking of applying for a lease extension or a collective enfranchisement, call us today – our team are specialists in this really complex field and are happy to provide you with free initial legal advice on the phone.
So for advice from a specialist lease extensions law firm;
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