If the freeholder of your property constantly sends you letters about the finer points of your lease, then you might think that having an absentee landlord sounds like a good idea. But what happens if your landlord is so distant that they’ve vanished altogether? A missing freeholder is a surprisingly common situation – and it can create all sorts of problems for the unwary leaseholder. And missing freeholders and building insurance can be a particular problem.
Problem with a missing freeholder or question about an absent landlord? Call our specialist solicitors on FREEPHONE 0800 1404544 for FREE initial phone advice – with no strings attached.
Our team represents clients both locally in Wiltshire, Hampshire, Somerset, Dorset and Berkshire and throughout England and Wales.
Buildings Insurance on my block – who should pay?
In recent years, there has been a remarkable increase in the number of leaseholders looking to buy their own buildings insurance when they purchase their flats.
Buildings insurance is more usually provided by the owner of the freehold (an obligation which should appear in the lease) who recoups the cost through service and maintenance charges. However, if the freeholder is impossible to track down, it can prove very difficult to prove that the building is insured. Not only can this make it nearly impossible to get a mortgage, but it leaves the leaseholders extremely vulnerable if they are uninsured and there is some form of serious damage to the building.
The situation is further complicated by the fact that leaseholders often can’t buy their own buildings insurance unless the terms of their lease say they can. Leases can sometimes be surprisingly vague on this point.
Although it’s generally the freeholder’s responsibility to insure the block, it’s never safe to assume that this is the case, especially if the freeholder can’t be contacted. You could have the unwelcome surprise of a bill for the full rebuilding cost of the property if it burns down.
How absent landlords can cause problems in enforcing lease restrictions and obligations
Another point to consider is that missing landlords aren’t around to enforce the terms of all the leases in the building. This means you have to rely on the goodwill of your neighbours to ensure that there is proper block management – that essential repairs and maintenance works are carried out and that the building is properly insured – a precarious position to say the least.
Again, many lenders are reluctant to offer mortgages on leasehold properties in this sort of situation. You may find that you need to take out special indemnity insurance before you are even considered for a mortgage loan.
So what is the best course of action if you want to buy a flat or other leasehold property and the freeholder is out of reach?
As always, it’s absolutely essential to get a good lawyer with plenty of experience of dealing with lease problems and absent landlords in particular. You need someone to highlight and minimise the risks, and above all, to check the terms of the lease. If everybody’s clear about who is responsible for insuring the property, then you’ll be in a much stronger position, whether or not the landlord has gone AWOL.
Our specialist five strong leasehold team deal with absent freeholders on a regular basis. And we are members of the Association for Leasehold Enfranchisement Practitioners – the U.K.’s only organisation for solicitors and surveyors who specialise in this area.
Missing freeholder – is freehold purchase or right to manage the answer?
In fact, if your freeholder is missing, that a particularly good reason why you might consider exercising your right to manage or right to buy the freehold of your block.
We are specialists in freehold purchase (or collective enfranchisement as it is often known), right to manage companies and lease extension and have a 5 strong team dedicated to nothing but those areas.
In addition, if you’re unable to pull together enough other leaseholders to exercise your right to manage – or you don’t want to take on the right to manage yourself, there is another alternative – that is not often used and understood by very few solicitors.
Click here to read about the court appointed property manager.
Absent freeholder – problems with extending your lease?
Click here to find all about the answer to lease extensions with an missing freeholder – the Vesting Order – and how we can help
Problems with a missing freeholder or absentee landlord? Call us today
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