Absentee Freeholders Explained
This article will explain tracing a freeholder process and some background about absentee freeholders in the UK. UK law is old, complicated, and filled with rules that can leave people scratching their heads. The complexity of something like land and lease ownership has come about thanks to centuries of new laws being introduced on top of older ones, creating a chaotic landscape that even the most skilled of legal professionals can struggle to negotiate.
When an issue like an absent freeholder comes about, most people don’t know what to do, and the odds are that you don’t even know what a freeholder is. There are a lot of different problems that can come about when you don’t have a freeholder looking after your property. To give you an idea of what this means to you, this article will be exploring these problems before taking you through 5 steps that can be taken when you are searching for your freeholder.
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What Is A Freeholder?
In simple terms, a freeholder is a land or property owner. Typically, people will have leases in place with a freeholder, enabling them to use the land for themselves, while feeding money to the freeholder for the privilege.
This sort of arrangement is most common with modern blocks of flats, with each of the small residences inside being separate properties that are all attached to a single lot of land. This means that even if you own your flat you could still have a freeholder that owns the land it sits on.
While this doesn’t usually cause problems, it can often mean that those who own properties or have leases in place can’t change their space without permission from the freeholder. Of course, though, what happens if your freeholder can’t be found? You can’t break the law, so you need to look for other options.
The Problems With An Absent Freeholder
There can be loads of reasons for a freeholder going missing becoming an absentee freeholder. A company may have dissolved or an individual freeholder may have passed away, and these are just two examples of how this sort of mess can come about.
There are many issues that can arise when a freeholder can’t be reached, but we’ve compiled the most crucial of these issues below so that you can see the scope of this problem for yourself.
Leaseholder Disputes
While people will sign an agreement before they can take on a lease, it is impossible to cover everything in a document like this. This can cause big problems when two leaseholders that have to share the same space have a disagreement.
For example, leaseholder disputes can often come about when two flat residents disagree about noise levels in a building. The freeholder can set rules and give instructions to solve an issue like this, but it will be very hard to get to problem solved if you can’t find them. This sort of dispute can be a lot more serious, making it crucial that freeholders are available to help if you get stuck in this position.
Building Repairs & Maintenance
Leaseholders will usually only be responsible for managing their own space, and this will often come with restrictions that mean the freeholder has to carry out repairs and maintenance. If a freeholder is missing, though, it will be extremely difficult to have a building kept in good shape, and major problems like leaks or broken boilers could remain for years.
This has gotten harder as time has gone by. In the past, many construction companies and contractors would be happy to work at a leaseholder’s request, but legal disputes over this type of action have forced them to take the freeholder more seriously.
Leaseholder Mortgages/Agreements
Freeholders often don’t own the buildings that are on top of their land, and this creates a challenge for leaseholders that want to get a mortgage or sign other agreements. Banks and other lenders will be unwilling to put money against a property when the land is owned by someone else, though insurance can be a good way to overcome this problem.
A great example of this comes when someone wants to buy a flat. While the owner of the flat will be happy to sell, there will be no guarantee that the freeholder won’t want their land back at the end of the lease, leaving the flat to be demolished. This presents a lot of risk to mortgage providers, and it makes sense that they would want to avoid it.
Insurance & Protection
Insurance can be bought to cover just about every aspect of a property, but you can’t insure something that belongs to someone else. This means that your freeholder may be the only person who is able to take out insurance on the building you live in, but they won’t be able to do this if they aren’t around.
This could cause problems if you own a flat on a freehold that gets damaged by a natural disaster. While your own insurance may cover your flat, there won’t be anything to cover the building itself, and this means that your claim won’t result in you getting your old home back. In fact, this can leave you without a place whatsoever.
Gaining Freeholder Consent
Consent is a big part of the agreement that freeholders have with their leaseholders, and it is important that a freeholder is aware of changes that are being made to their property. For example, replacing windows in a large building can be a good way to save money on power bills, but you will need the permission of your freeholder to do this.
This problem is quite big because it often pushes leaseholders and tenants to make changes without consent. Not only is this illegal, but bit it could also cause problems for the freeholder, especially if the building or land is protected and changes can’t be made to it.
With all of this in mind, you should be feeling ready to take on the challenge of dealing with the issues that can come with an absentee freeholder. You can find a detailed guide to help you to overcome this problem below, giving you the chance to find your freeholder and get everything handling correctly.
Tracing a Freeholder
Do you need to trace a freeholder? This blog post covers how exactly to be tracing a freeholder and is written by the leading Freeholder Tracing agents Find UK People®.
Many leaseholders in the UK at some point will need to trace and locate a current address for the freeholder of a property if they are not in contact with the freeholder. Whether it is to renew the lease or some other matter it can be very frustrating when an absentee freeholder is not contactable.
Of course, the land registry records may have an old address for the freeholder of the property but normally this information is old and out of date with a very historic address and you will need to utilize a specialist tracing service to trace the freeholder to a current and contactable address so you may proceed to contact the absentee freeholder.
The problem of an absent freeholder tends to arise most often where houses have been converted into flats. With such conversions, the freeholder would have sold off the flats on very long leases typically, thereby capitalizing on the value of his or her interest.
Whilst remaining technically as a freeholder, the freehold value is minimal when compared to the long leasehold interests sold off. In such scenarios, the freeholder may lose interest or even forget about owning the freehold, he or she might have moved to a new address or even passed away.
These situations can continue for many years, especially because many of the flat-owning leaseholders may not see it as a major issue. They don’t tend to pay service charges and may even be ignorant that the freeholder will typically have the role of arranging buildings insurance for the overall building and then seeking reimbursement from the leaseholders.
Some leaseholders may also, in some ways, see the lack of involvement of the freeholder as advantageous in that they may be tempted to make changes to the flat which would require freeholder consent without worrying about it, on the basis that a lack of a freeholder reduces the risk of action being taken for breach of lease covenant. Unfortunately, this approach can prove to be short-sighted.
The ultimate resolution of an absent freeholder situation is to apply to court. The necessary form of application will be for Vesting Order in the County Court.
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Important Freeholder Tracing Information
It is a prerequisite for an application for a vesting order that as a leaseholder you have made sufficient attempts to try and contact and locate the freeholder or tracing a freeholder such as using a specialist freeholder tracing agency
A specialist freeholder tracing service from Find UK People® will normally locate most freeholders who are absent in just 24 – 48 hours and the service is on a no find no-fee basis so the risk of using the service is minimal. This freeholder tracing service is one of the fastest at tracing freeholders to a current address in the UK or abroad and many customers have found success in using this service which can be verified on sites such as Trustpilot
Find UK People® has a very experienced Freeholder tracing team which results in accurate location details being supplied pin a very short time frame of 24 – 48 hours for most absentee freeholder tracing cases. Our team will talk through any freeholder tracing cases with you to fully understand the individual matter and then once all the information has been taken we can move forward with the location of the freeholder.
If in the event we cannot locate the freeholder we can also supply a report for the court to evidence this outcome for you to present to the court for consideration in any case you may have.
Leasehold properties in the UK
Leaseholder properties in the UK can only be owned for a fixed period of time. This is often the case with flats or houses in shared ownership. The leaseholder will have a legal agreement, or a lease, with the landlord, otherwise known as the “freeholder”.
This could go on for a number of years but it’s a set amount of time and when the lease of property comes to an end and the freeholder will regain ownership. In certain cases, there could also be issues with an absentee freeholder. This is when the freeholder isn’t around for various reasons and doesn’t have involvement with the property anymore.
How do leasehold properties work in the UK?
In the UK, a leasehold property is where the leaseholder only owns it for an agreed period and the freeholder is the one that owns the land it’s built on. The leaseholder and freeholder must come to an agreement and terms and conditions are arranged in the contract. This includes the time of the lease. Leaseholds are common especially with flats or maisonettes that exist within a common building. Leases tend to be for a number of years and often at least seventy to ninety years, but leaseholders can buy, sell, extend, or terminate their lease at any time.
What rights do leaseholders have in the UK?
The freeholder will be in charge of insurance for the leasehold property but leaseholders are entitled to get any information about this. Under a lease, the leaseholder will also need to pay service charges to the freeholder. These service charges will normally cover things like repairs, maintenance, or any necessary improvements to the building itself or any communal areas. Leaseholders have the right to find out about these service charges and what they’re used for at all times.
Leaseholders also have the right to know the freeholder’s name and address, and this can cause some issues with an absentee freeholder. The reason for this is that the leaseholders will often need information about any changes to the lease or property, or legal issues. Leaseholders have the right to be consulted about certain maintenance and running costs as well, and without a freeholder present, this can be problematic.
Is the freeholder responsible for maintaining the property?
The responsibilities leaseholders have depended on the conditions they agreed to in the lease. If you want to make alterations or improvements to the property yourself, you may need permission from the freeholder. The costs of maintenance also need to be discussed before in the contract and how much the leaseholders will be expected to pay.
In general, most leases state that the leaseholder is responsible for maintaining and repairing at least the inside of the home. This can include various repairs such as any decorating, including the flooring and walls like floorboards and plasterboards, all furniture and appliances, internal electrics, and plumbing. The freeholder, on the other hand, is responsible for external maintenance such as structural repairs to the roof and guttering, and communal areas including stairs and lifts, particularly in blocks of flats.
In many cases, there will also be an agreed reserve or sinking fund to cover unexpected maintenance and avoid disputes. Any service charges or sinking funds will be shared between leaseholders and this is often the case with blocks of flats. Building insurance is also paid within the service charges.
Is it possible to buy the leasehold property?
It is possible for leaseholders to buy the property outright from the freeholder. This depends on the type of property, it’s less complicated with a house than a flat, for example. In the case that the freeholder wants to sell the property, they are required by law to offer it to the leaseholders first, and if they don’t want to buy it they are free to sell it to a third party.
Leaseholders are also able to extend or terminate their lease but this needs to be agreed by the freeholder. If a landlord wants to end a lease they will have to go through official proceedings with the court’s permission.
What happens when there are leasehold disputes?
There are two main ways leasehold disputes can be resolved. One is by using a mediation service and the other is to go directly to a tribunal. Leaseholders can be involved in disputes with the freeholder for a number of reasons relating to service charges, changes to the lease, building insurance, and other financial issues. These can be difficult to resolve with an absentee freeholder and often they will then need to be tracked down.
What are absentee freeholders exactly?
An absentee freeholder is a landlord that is simply not present and this could be due to various reasons. If the landlord never lived in the property, they might have moved to a new address or are possibly deceased. The freeholder might have even lost interest or forgotten about owning the property. Absentee freeholder issues can go on for a long time. They often occur when houses have been converted into flats and the flats have been sold on very long leases and the leaseholders might not consider the lack of involvement from the freeholder as an issue.
Unfortunately, if the freeholder isn’t around they won’t be able to carry out any legal obligations such as carrying out necessary repairs or insuring the building. They also won’t be able to resolve leaseholder disputes. This could result in the property falling into disrepair which could affect the later sale of the property or mortgages, and of course, practical implications for the leaseholder. It’s, therefore, necessary to investigate or locate an absentee freeholder.
At Find UK People, we offer freeholder tracing services on a no trace no fee basis. We are experts in locating absentee freeholders and provide a quick and effective low-cost freeholder tracing solution.
If you’re in urgent need of the address of an absentee freeholder, find out more today
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