• Developer Is Selling Freehold

    By Guest on 02nd Feb 2017

    Hi,

    Our developer is selling the freehold of the development we are purchasing in. We are ready to exchange but our convenyancer says there is not guarantee and protection for us as the freehold sale could be comleted before we exchange. Therefore our current lease agreement could be invalid. The developer is unfortunately not providing any documentation to guarantee that we will not be under risk. Are they legally obliged to?

    Thanks,

    Anna

  • 1 Answers

    By Guest on 07/02/2017

    Hi,

    No they are not obliged. It's difficult to offer any specific advice without having sight of the file but from how you describe it your solicitor is right to be worried. You will be granted a lease out of the freehold by the developer, but if by the date of completion the developer is no longer the freeholder you won't be able to get that lease registered. You might be able to sue the developer for breach of contract, or you might have an equitable lease which the courts could convert to a legal lease but you don't want to end up down either of those roads and if you are buying with a mortgage you won't have the option. It is usual for a developer to wait until the sale of the last flat is completed before selling the freehold. Even if contracts are exchanged on the sale of the freehold before you complete you could still be in trouble as, from exchange, the developer holds the freehold on trust for the buyer effectively. It sounds like your solicitor knows just what he or she is doing, so follow their advice.

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