Acting for buyer of a small ground-floor maisonette in Gateshead NE8, Fridaysmove Gateshead Property Conveyancing Solicitor Labeeba Zia had to sort out a few problems with the title.
The Gateshead branch of Yourmove agents at 449/451 Durham Road, Low Fell, Gateshead had sent sales details showing that the price was in the vicinity of £53, 000. Shortly afterwards a draft contract and copy of the land registry title was received from Eversheds, the Conveyancing Solicitors acting for the sellers. From a check of the documents it appeared that title to the property was leasehold, on a 999 year lease. It was also noted that the maisonette was not being sold by the registered owner, but by a mortgage lender.
Repossession: The Facts
When a property owner defaults on their mortgage payments, the law permits lenders to repossess the property, and then sell it. Such cases have arisen more frequently over the last few years. A Conveyancing Solicitor acting for a buyer needs to check that a lender is entitled to sell, and that their client will be become the registered proprietor once the sale has been completed. In most cases nowadays the lender will be able to use a special form of land registry transfer, and in this case the Solicitors had sent a draft transfer form, to be completed with the buyer's details.
It is often found in these repossession cases that in addition to the main mortgage, charges for other loans are registered, and it may even be that the owner has been made bankrupt. Fortunately in such cases the law allows mortgage lenders to sell and give good title to purchasers, and any subsequent charges will then be removed from the title. Anyone buying a repossessed property may continue to receive correspondence and calls for the previous owners, but they should not be liable for that owner's debts.
Understanding cross-over leases
Labeeba also discovered that the registered owner also owned the freehold of the maisonette on the first floor, while the leaseholder of that maisonette owned the freehold of the property being sold. This is a common arrangement for such maisonettes, and are known as "cross-over" leases. Each owner will be responsible for repairing their own part of the building, but each owner will want to make sure that the other owner carries out any essential repairs. For example the owner of the ground-floor will want to make sure that the roof belonging to the upper maisonette is repaired, while of course the owner of the upper maisonette will want to be able to recover a share of any such repair costs from the other owner. The scheme for each owner to have a long lease of their own property and the freehold of the other property provides a legal framework so that mutual obligations can be enforced.
For this arrangement to work, it is essential that when a maisonette with a cross-over lease is sold, the buyer acquires not only the leasehold title to the maisonette itself, but the separate freehold title to the other maisonette. Labeeba therefore had to make sure that this took place. For a lender to be able to transfer title, the mortgage has to be registered against both titles. Problems have sometimes arisen because the mortgage has not been registered against the freehold, but in this case that had been done. The lenders were therefore able to transfer both titles without further difficulty, and Labeeba was soon able to complete the purchase.
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