Legal Q&A: what is the difference between a good and an absolute leasehold title?

We've seen a flat we want to buy but it comes with a good leasehold title, not an absolute title. What does this mean and how will it affect us?
Merrily Harper
Fiona McNulty11 September 2018

Question: My father says we must not buy the flat we have seen and very much want, because it has good leasehold title. What is the issue?

Answer: Absolute title is the best form of ownership and is granted when the Land Registry is satisfied with the freeholder’s/lessor’s title. Good leasehold title is granted when the registry is satisfied regarding the leaseholder’s title to the property but not satisfied regarding the freehold title. An example is when the freeholder cannot be identified.

Sometimes an application to register leasehold property is made but the freehold is unregistered. If the applicant fails to provide evidence of the freehold title to the Land Registry, the property will be registered with good leasehold title.

A good leasehold title may be vulnerable to challenge, for example, there may be an issue if someone proves they own the freehold title and that the person who granted the original lease had no right to do so. Accordingly, some lenders will not lend where the security for the loan is a property with good leasehold title. However, some will, provided an indemnity insurance policy is in place upon completion of purchase. Establish your lender’s position as you may need to change lenders.

It is possible to upgrade good leasehold to absolute title. Ask your solicitor if such an application is possible in your case.

These answers can only be a very brief commentary on the issues raised and should not be relied on as legal advice. No liability is accepted for such reliance. If you have similar issues, you should obtain advice from a solicitor.

If you have a question for Fiona McNulty, please email legalsolutions@standard.co.uk or write to Legal Solutions, Homes & Property, Evening Standard, 2 Derry Street, W8 5EE. Questions cannot be answered individually, but we will try to feature them here. Fiona McNulty is a solicitor specialising in residential property.

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