property
Buying leasehold and freehold
<p>I'm on the cusp of purchasing a house. This was advertised to me as freehold though it has become clear through conveyancing that the situation is more complex than that.</p>

<p>In buying this house I would for some reason be buying the freehold and the leasehold, both. At some point in history the leasehold owner aquired the freehold and never combined the two.</p>

<p>My solicitor says there may be some reason behind this like some sort of rights hidden in one of the ancient contracts but has been light on details beyond this. </p>

<p>Is this at all a normal situation? What reasons could there be to keep the two seperate but in the same hands?</p>

<p>This could have occurred for a variety of reasons, but is usually a way for a developer (or freehold asset company, or local authority) reserve control, or keep open a revenue stream of fees on an estate. As you are no doubt aware, the lease is essentially a contract between the landlord and the tenant, stipulating rights, reservations and obligations over a demised piece of land. It is common for freehold management companies to charge fees for issuing consents to alterations, keeping pets and such like. And of course premiums can be charged by a landlord for renewing leases, although the legislation governing leasehold houses is slightly different (see <a href="http://www.legislation.gov.uk/ukpga/1967/88/contents" rel="nofollow noreferrer">Leasehold Reform Act 1967</a>).</p>

<p>This kind of freehold/leasehold arrangement was also common in older 'equity release' sale and leaseback schemes, where the owner sells the freehold to a third party who then leases the property back to the tenant, usually at a nominal rent.</p>

<p>That being said, some developers of new estates have sold houses as leasehold (as good as freehold, apparently). It's a problem that's come into sharp focus recently and the government has issued <a href="https://www.gov.uk/government/publications/fixing-our-broken-housing-market" rel="nofollow noreferrer">White Paper</a> intending to legislate further, and perhaps ban the sale of new leasehold houses. </p>

<p>It may have been the case for the previous owner that when they came into ownership of both leasehold and freehold interests it didn't affect their enjoyment of the property in any way, so the titles were never merged. </p>

<p>Provided there are no outstanding charges or incumbrances, both freehold and leasehold titles are in the same ownership and there is clear intention to merge the estates, this can be dealt with quite easily by application to the Land Registry. </p>

<p>I'd suggest asking your solicitor to send you the lease, and explain any terms or provisions you're not sure of or don't understand. </p>
