Esther Marshall
Legal
Dealing with Absent Freeholders
An absent freeholder will usually arise in situations where a house has been converted into flats and the leaseholder of the property is unable to find the freeholder.
Once the house is converted into flats, those flats are sold with long leases. The freeholder would still have a separate legal interest in the property but the real value would be in the long leases. As the freeholder would have earned the value in the property when selling the flats, they will likely have no interest in the property.
The leaseholders are unlikely to pay service charges and might not even be aware of the existence of the freeholder. As the leases will be granted for a long period, sometimes over 100 years, it can be difficult to locate the freeholder after a certain time. The freeholder might have moved address or the freeholder might die and it might be difficult to locate their beneficiaries.
Absent freeholders present problems
An absent freeholder can cause a number of issues for leaseholders.
Freeholders are generally liable for arranging building insurance and ensuring that common areas, such as entrances and stairways, are kept in good condition. Without a freeholder, there is no one the leaseholder can raise these concerns too.
If the lease needs extending, the leaseholder will need to obtain agreement from the freeholder in order to process the extension. Without the freeholder, the leaseholder will have no choice but to obtain a vesting order from Court. The vesting order will then allow the leaseholder to extend the lease or purchase the freehold.
Locating an absent freeholder
If an application for a vesting order needs to be completed, reasonable efforts need to be taken to locate the freeholder. This could include:
- Checking the probate records online to see if the freeholder has died. In order to do this, you will need the freeholders date of death.
- Placing advertisements in local newspapers
- Writing to the freeholder, if you have their address
- Hiring a tracing agent to locate them
Related insights
Esther Marshall
Janeet Jawanda
Janeet Jawanda, a Solicitor in the Dispute Resolution team, said:
“Mullis and Peake regularly deal with applications for vesting orders in the absence of freeholders. Unfortunately, it can be a lengthy process for leaseholders but if the freeholder cannot be found, the leaseholder will have limited options but to seek the Courts involvement.”