Missing freeholder: what does it mean if you want to sell your flat?
If you own a leasehold flat and cannot trace the freeholder, day-to-day life may carry on much as before. The difficulty often becomes apparent when you decide to sell. Your buyer’s solicitor and mortgage lender will want to understand who is responsible for the building and whether the obligations in the lease are being met.
The freeholder’s absence does not make the lease disappear. Depending on its terms, the landlord may be responsible for arranging buildings insurance, maintaining shared parts, collecting service charges and dealing with breaches of the lease. In some buildings, a separate management company has some of these responsibilities, so the first step is to check the lease rather than assume that everything has stopped.
Neighbours sometimes make their own arrangements to insure and maintain a building. That may keep it in good condition, but a buyer’s solicitor will still need to establish who has legal authority to make decisions and collect payments. Unclear arrangements can lead to further enquiries, delays or difficulty obtaining a mortgage.
If you think your freeholder is missing, investigate early. Check the freehold title at HM Land Registry and, if the freeholder is a company, its details at Companies House. An address on a register may be out of date, and the freehold may not be registered, so these checks may not settle the question. Your solicitor can advise what further steps are needed to show that reasonable efforts have been made to find the landlord.
There may be ways to resolve the problem. Where the building and leaseholders qualify, leaseholders can join together to buy the freehold through collective enfranchisement. Agreement from every flat owner is not necessarily required: generally, leaseholders of at least half the flats must participate. If the freeholder remains untraceable after reasonable efforts, the participating leaseholders may be able to apply to the county court for a vesting order. The First-tier Tribunal will usually assess the purchase price.
Buying the freehold is not the only possibility. Depending on the circumstances, leaseholders may be able to take over management through the right to manage without buying the freehold. An individual leaseholder who needs to extend a lease may also have a route through the court where the landlord cannot be found. A specialist leasehold solicitor can advise which option addresses the particular problem.
If you are considering a sale, speak to a solicitor experienced in leasehold property before putting the flat on the market. Establishing what the lease says, documenting how the building is managed and investigating the freeholder’s whereabouts early can help you identify problems before a buyer raises them.