850 Year Lease Part 2

I'm in a bit of a quandary and looking for some advice-in a nutshell me and my wife are buying out a 1/2 a house (her late mother's),she inherited the other half.We have a loan ready to go with the Bank of Scotland etc etc
but I found out this morning that the title on the deeds is leasehold (850 years)-the bank have no problem so all looks OK but here's the nub-

what if I want to sell the house say 5 years down the road,am I going to have problems then selling a leasehold as opposed to a freehold,is this a concept even known in Ireland?

The other thing I've been told is that I can buy this lease out for a nominal sum,but how do I do that when the house was originally built in 52? How do you contact the person owning the lease?plus should we get
the lease bought out done before proceeding?

To complicate matters further my wife and her brother have strong memories of their mother saying she owned her own house and bought it out sometime in the '80's-is it possible this happened and the deeds weren't changed?

Thanks in advance,any help appreciated

Hi Reilly,

Unless I'm interpreting this completely incorrectly there is no issue whatsoever. It's unlikely to be a problem for the next 20 generations or so the fact that there is an 850 years lease. It used to be the case that you could buy out the lease for 12 times the ground rent (which is probably about a tenner a year). So crack open the bottle and enjoy your new house If you contact the "landlord" they'll be able to tell you if there already was a buyout (a lot of people did this years ago when the legislation was changed because of "800 years of repression etc etc ......")

Roy

Thanks Roy,

I suppose what I'm getting at is selling the house down the road,do you think potential buyers will have a problem with a leasehold situation,I mean would I get full market value etc...

Does the Land Registry ground rent purchase scheme apply in the case of such leaseholds?

Didn't have time to check the link but I'd say that the one Clubman.

Reilly's should be no worries - it happens all the time and does not impact house prices.

Roy

Thanks Roy and clubman for the link...does leasehold automatically mean the ground rent or can it mean the actual house as well?,if it was just the
ground rent then it looks like I'm OK under that link provided....

onekeano said:

Didn't have time to check the link but I'd say that the one Clubman.

Reilly's should be no worries - it happens all the time and does not impact house prices.

Roy

Click to expand...

Sorry - I didn't realise that you had referred to this scheme! No harm in posting the link though...

I checked with the Land Registry today and they have no folio number for the property-does this mean anything? What's confusing me is my wife and other relations are certain their mother owned this house and the guy in the Land Registry said no Folio could mean that she did and there is no leasehold,if so why is leasehold written on the deeds?Is it possible there is another set of deeds or that the deeds are wrong?

Thanks again....

PS-I've asked my solicitor to do a search but the absence of a folio is going to make it hard I would think...

There are two systems of registration of title in Ireland - Land Registry and Registry of Deeds. They are mutually exclusive and what the Land Registry told you was that this property was not registered land i.e. was not registered in the Land Registry. I assume ( and your solicitor will confirm this simply by looking at the Deeds - has he/she got the deeds yet? ) that the title to this property is unregistered i.e. title is in the Registry of Deeds. It is a pefectly good title.

It should be relatively easy to find out if your late mother in law bought out the freehold -there may have been a neighbourhood group who acted together, there should be a vesting certificate somewhere ( for some bizarre reason many of my clients keep their title deeds in the hot press!!!), it may be in a safe place at home, her solicitor may have it, the Land Registry may have some note of it, the ground landlord may have some note of it.......

mf

Thanks MF1....maybe you know the answer to this-if we want to buy out the freehold-assuming that the property isn't already freehold,how likely is it that buying out the lease would be a significant sum of money?Everyone is telling me not to be worrying that it will only be a nominal sum but I'd like to be sure.The two solicitors involved don't seem to be as concerned about this as much I am which worries me more-how do I know that buying the freehold isn't going to cost say 100,000 Euros?Thanks again....

The buy-out of the ground rent is set at a capital sum which (in theory) will yield an income about the same as the ground rent. In times of high interest rates, this meant a buy-out figure of 10-12 times ground rent. These days, 20-30 times ground rent is the normal buyout figure. If you go through the Land Registry compulsory scheme, the figure will be set by the Registry, and should not be any more than 30 times ground rent.

thanks MOB, does lease automatically refer to the ground rent only or can it refer also to the building itself?

It is called "Ground Rent" for historical reasons (plots of ground would have been leased, the original tenant was responsible for putting up the building), but there is no issue of substance to worry about here: if you own a leasehold there are rules which set out whether you are entitled to buy out your freehold; On an 850 year old lease it would be normal for the lease to be in terms which allow you buy it out; The Land Registry will deal with this for you.

Im currently buying out my ground rent along the lines advised in earlier posts. The multiply in my case is 24 times, and this is costing around 1,000 euro in total. Its seems a simple process, so fire ahead!