{"id":709,"date":"2022-08-15T14:14:26","date_gmt":"2022-08-15T14:14:26","guid":{"rendered":"https:\/\/springbokproperties.co.uk\/blog\/?p=709"},"modified":"2022-08-15T14:14:26","modified_gmt":"2022-08-15T14:14:26","slug":"selling-property-with-absent-freeholder","status":"publish","type":"post","link":"https:\/\/www.springbokproperties.co.uk\/blog\/selling-property-with-absent-freeholder","title":{"rendered":"Selling a Property with Absent Freeholder"},"content":{"rendered":"

Absentee freeholders can cause no end of trouble for the residents of leasehold property. If you\u2019re struggling to get in touch with the outright owner of your home, it can be difficult to know what to do – particularly when the time comes to sell and move on.<\/span><\/p>\n

In this guide, we explore the issues involved in selling leasehold property with an absent freeholder and explain how to achieve a sale quickly, in a straightforward and fuss-free manner.<\/span><\/p>\n

What is a Freeholder?<\/span><\/h2>\n

If you live in leasehold property – such as a flat or a house on a shared ownership development – it means that you have bought the right to live in that home for a <\/span>specified number of years<\/span><\/a>.<\/span><\/p>\n

However, the freehold title of the wider building or development will belong to a certain individual or company. This party, known as the \u201cfreeholder\u201d, retains absolute ownership of the property and its associated land.<\/span><\/p>\n

They are usually tasked with managing the maintenance, repairs, cleaning and upkeep of the main structure of the building, as well as any communal areas therein. Many freeholders handle disputes between leaseholders too.<\/span><\/p>\n

The task of calculating, setting and collecting ground rent, service charges and other sums related to the property also falls to the freeholder. They should provide reports informing the leaseholder of the ways in which this money is being used.<\/span><\/p>\n

Another freeholder responsibility is the acquisition of buildings insurance. They must also pay the associated premiums, though the leaseholder may have their own contents insurance.<\/span><\/p>\n

Who is the Freeholder for My Flat?<\/span><\/h2>\n

If you\u2019re not sure who owns the freehold title for your home, you can take a look at the information held about the property by<\/span> HM Land Registry<\/span><\/a>.<\/span><\/p>\n

While many freeholders remain very active in the management of their property, others do not. On occasion, a freeholder will become entirely uncontactable and apparently cease to uphold their duties. This is known as an \u201cabsent freeholder\u201d.\u00a0<\/span><\/p>\n

Whether you\u2019re faced with unanswered emails, an unrecognised phone number or calls going straight to voicemail – if you\u2019re not able to contact the owner of your building for an extended period of time, you may have run into an issue of this kind.<\/span><\/p>\n

Much like an absentee landlord, an uncontactable freeholder can cause all kinds of problems.\u00a0<\/span><\/p>\n

Issues with the payment of service charges or questions about building regulations, electrical installations, damage, maintenance issues and anything else besides can cause frustrations to mount when there\u2019s no way of speaking to the person responsible.<\/span><\/p>\n

This can be particularly stressful if you intend to sell your home in the near future.<\/span><\/p>\n

So – what should you do in these circumstances?<\/span><\/p>\n

Selling a Flat with an Absent Freeholder<\/span><\/h2>\n

If your freeholder is absent, you may find yourself struggling with numerous obstacles when preparing to sell a leasehold flat or house. The most common problems are as follows:<\/span><\/p>\n

1. Your conveyancer may need to contact the freeholder<\/span><\/h3>\n

In many cases, the seller\u2019s conveyancing solicitor will need to get the freeholder of the property to fill in a LPE1 form.\u00a0<\/span><\/p>\n

Using this document, the owner must share certain information about the related ground rent, service charges, insurance and other vital matters.<\/span><\/p>\n

If you have been unable to get in touch with your property\u2019s freeholder, it is likely that a legal specialist would also struggle to do so when the time comes to complete an LPE1.<\/span><\/p>\n

If your freeholder is also the building\u2019s managing agent, your conveyancer may also need them to hand over a \u201cseller\u2019s pack\u201d or similar. Naturally, this won\u2019t be possible if they remain uncontactable.<\/span><\/p>\n

2. Properties in poor condition take longer to sell<\/span><\/h3>\n

If you live in a home that has not been properly maintained, it will be harder to sell.<\/span><\/p>\n

When a freeholder has been absent for a while, it is likely that their building will have fallen into some disrepair. At the very least, the communal areas and outdoor spaces may look a little shabby and perhaps somewhat outdated.<\/span><\/p>\n

Buyers do not tend to find neglected property attractive, and prospective future leaseholders will not be keen to pay service charges to a freeholder who clearly does not take proper care of their building.<\/span><\/p>\n

For this reason, your leasehold property is likely to sit on the market for some time – with little interest – if you are unable to make contact with the outright owner of its title.<\/span><\/p>\n

3. Mortgage lenders will hesitate to get involved<\/span><\/h3>\n

Due to potential problems with maintenance and insurance – as well as a possible lack of dispute resolution options – most prospective buyers of leasehold property with an absentee freeholder will likely find their mortgage provider very hesitant to lend.<\/span><\/p>\n

There are ways around this issue, however. By arranging Absent Freeholder Indemnity Insurance, you may be able to make the property much more attractive to buyers and their mortgage lenders.<\/span><\/p>\n

We\u2019ll explain a little more about this type of cover later on.<\/span><\/p>\n

4. There will be no one to turn to for additional information<\/span><\/h3>\n

You may need to provide a buyer with certain details about the property – such as information on insurance, warranties, access to particular areas, or even just a new copy of the terms of the lease.<\/span><\/p>\n

They should also be given the contact details of the freeholder in case they need to report any maintenance problems, disputes with other leaseholders or issues affecting the wider building\u2019s insurance.<\/span><\/p>\n

Naturally, if you are unable to reach the freeholder using the details you have for them, the new buyer will not be able to do so either.<\/span><\/p>\n

5. Licence to Assign cannot be confirmed<\/span><\/h3>\n

Can a freeholder stop a sale due to their absence? In some cases, yes. Some agreements state that the leaseholder will need the consent of the freeholder in order to sell their house or flat. This is known as \u201cLicence to Assign\u201d, and will usually be stated in the lease terms.<\/span><\/p>\n

If you have been unable to contact your property\u2019s freeholder, you won\u2019t be able to ask them for their consent in order to sell.<\/span><\/p>\n

Absent Freeholder Indemnity Insurance<\/span><\/h2>\n

Absent freeholder insurance is a very important product for any leasehold property resident. Having cover of this kind in place will help to appease most buyers\u2019 mortgage lenders, as it will show them that their client is protected should the freeholder reappear unexpectedly.<\/span><\/p>\n

Specifically, this kind of insurance is arranged to cover a leaseholder who:<\/span><\/p>\n