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Alex J.
Alex J., Solicitor
Category: Law
Satisfied Customers: 3840
Experience:  Solicitors 2 years plus PQE
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I am trying to buy a property that is under the terms

Customer Question

Hello, I am trying to buy a property that is under the terms of the s106 agreement that states that only first time buyers living locally can purchase it, it is a leasehold house (93 year lease). I had problems finding a lender - only 2 lenders would consider borrow money. Moreover the price it is sold for is so high that it is in line with similar freehold properties in the area. Unfortunately due to very low supply the prices are reaching very high levels. I wonder if there is any probability of removing that condition about first time buyers living locally as I am afraid the price is quite high and it will be very hard to sell it in the future.

Submitted: 2 years ago.
Category: Law
Expert:  Alex J. replied 2 years ago.
Hi,Thank you for your question and welcome.My name is ***** ***** I will assist you.How many flats are in the block? Is the S.106 Agreement registered on the Charges registered of the property title? Kind regards AJ
Customer: replied 2 years ago.

Hello, as far as I know there are 28 houses on that street under that section 106. 2 houses are freehold - we were told by the council that they became freehold "by mistake".

Expert:  Alex J. replied 2 years ago.
Hi, Thank you. If the previous owner has been living there for more than 18 months it may be possible to force the sale of the freehold if the other properties agree. Have you asked the council whether they will remove the S.106 restriction?
Customer: replied 2 years ago.

The previous owner has lived there for around 5 years. We have asked the Council about removal of that restriction but we were told that planning committee would review that. We also got advised that generally it is not in council's interest to seek that sort of resolution. So we did not get clear advice on that. The planning committee has a meeting every 3-4 weeks, so it would take months before we get to know that. Do you think that it would be possible to ask about the freehold at some point even thought - those houses are perceived as "affordable houses" and they are all leasehold. This house is the only one - owned in 100%, others are share-owned.Do you know also how much those sort of changes would cost?

Expert:  Alex J. replied 2 years ago.

Hi, Thank you. I have come across issues like this before, the main issue tends to be where the S.106 Agreement is registered in the Financial Charges section of the Property title - this is often what causes an issue for the bank. Can you confirm whether this is the case? If that is the case, you may be able to give your bank comfort by asking the council to move the S.106 Notice to another part of the property register. You may potentially be able to Enfranchise the property and force the sale of the Freehold under the Leasehold Reform, Housing and Urban Redevelopement Act 1993. This is however a highly specialised area of law, and in order to consider this you would need to obtain an opinion from a valuer and a barrister to support your claim. As a starting point I would recommend that you go and speak to the Leasehold Advisory Service - - it is a free legal advice service set up by the Government - they will be able to give you a better idea as to whether enfranchisement is possible in this circumstance. I look forward to hearing from you. Kind regards AJ