I have been offered 50% of the freehold of my leasehold property - why is buying it so complicated?
My landlord has decided to sell the freehold. Both myself and the other leaseholder are interested and have agreed a 50% share each. We have agreed a price so you would think the transaction would be straightforward.
I planned to borrow additional funds on my existing mortgage to fund the purchase but my solicitor will not allow this to happen as he said money cannot be secured on a jointly owned freehold (even though my mortgage comapny are securing it against the leasehold interest but want to register the freehold against it) and without the required registration (either a deed of additional security or a deed of substituted security) the mortgage comapny will not lend. For the priviledge of this dispute, I have incurred £350 extra costs by the solicitor. I feel my solicitor is doing a really bad job of advising me, but obviously I am reluctant to change as the other leaseholder and I are using the same solicitor to keep the cost of purchasing the freehold low and I would have to pay the costs incurred to date and start over.
What would happen if I paid cash for the freehold - would the same paperwork have to be completed, thereby running into the same problems as the leasehold mortgage would still be registered against the freehold (but at it's current debt and not with the additional borrowing)? My solicitor is also claiming it would be better not to renew the leases at this stage but from reading around the subject, I get the impression it would be! My sole purpose of buying a share of the freehold is to keep any lease extensions etc to a minimum but if I have to apply for an extension in a few years, could the other leaseholder insist upon a payment for the extension?
For something I thought would be simple it is turning out to be a confusing mess. Any help or advice would be gratefully received.Report