4 ms·

Americans simply have no idea how (relatively) straightforward and simple their model of property purchase, sale and ownership are. In Ireland you get this let

Americans simply have no idea how (relatively) straightforward and simple their model of property purchase, sale and ownership are. In Ireland you get this letter in 8 point font from a company with no phone number demanding 1000 euro for ground rent and threatening you with legal action....AND it turns out to be completely legitimate because The Earl of Blah Blah and the Archbishop of such and such owned your ground rent until 1978 (when the Irish government finally ended the feudal system) and they sold it to some shifty operator who now collects and you're in arrears on your 11 euro per year since then and they've added admin charges...oh and you can buy out your ground rent, but you have to fill out a 12 page form and make sure you don't pay them unless you've confirmed they're the sole rights holder and if you forget to pay and the lease expires (you know because the solicitor forgot to mention the 275 year lease was expiring or something) then they own your house OR you have to pay them 1/8th of the value to claw back the house you bought perfectly legitimately. Mild hyperbole here.

dbdjfjrjvebd 7y ago
Leasehold is evil.
- tialaramex 7y ago
  Historically Leasehold was a necessary evil when two or more owners occupy the same 2D real property, as is common for example with flats (or "apartments" in US English) or where they unavoidably share parts of the property. England (and perhaps other places?) tried to fix this with Commondhold. The idea in Commonhold is pretty similar to Leasehold except that the Freehold of the 2D real property is held by a purpose made entity whose constituents are the owners of the properties contained in the Commonhold, so there can't be some dodgy offshore property holding company involved, between them the people who seem to own the place really do own it outright. Most likely they'll choose to outsource day-to-day management to a company which specialises just as the property holding company does, but as joint owners they have powers to fire that management company or demand to inspect its finances to see everything is done properly, and if somebody thinks they can do better (or has far too much free time on their hands) that's an option with consent of the other owners, it's nobody else's business. Unfortunately Commonhold was not a success. The tax status means that you can sell say 12 flats on Leasehold for £100 000 each, and then also sell the Freehold to a holding company for say £60 000. But if you offer those 12 flats as Commonhold, leaving nothing else to sell, the buyers will be reluctant to part with £105 000 each even though there's a good chance that Freeholder will ask for say £1000pa ground rent, so they'd be clearly ahead after just five years. So as a property builder it made no sense to sell Commondhold properties - the government didn't ban Leasehold for new properties, so Leasehold it is in almost every case.
  - dbdjfjrjvebd 7y ago
    Plenty of other countries only have equivalent systems to commonhold. Personally I value leasehold property as worthless. I wonder how many other people do? And how much this contributes to UK people being reluctant to live in flats?
    - rcxdude 7y ago
      The lease has a market value, and a utility, and comes with a pretty robust set of rights. I think it is wrong to write it off as worthless. That said, leases have a lot of variety, and some are better than others (and one reason for a general distrust of new build properties in the UK is newer leases tend to be a lot worse for the holder than older ones, in some cases catastrophically so). Free hold is almost never going to be worse, but lease hold can be just as good for most people.
      - dbdjfjrjvebd 7y ago
        The biggest most important right is to buy the freehold (or extend the lease). I would rather just own a freehold... As another poster pointed out many leaseholds today come with a share of freehold anyway.
  - rcxdude 7y ago
    The thing I don't understand about Commonhold is that it seems to be exactly the same as a lot of existing leasehold properties: About half of the leasehole properties I looked at when buying (generally the ones which were 2-4 flats in a building as opposed to a larger block) involved also getting a part share of the freehold. Also, you have a lot of rights as a leaseholder, especially as a group, so you can claim the freehold if the freeholder is charging excessively, so I'm not sure how much the change actually benefits you (If the government wanted to reduce abuses by freeholders, they would focus on making this process less expensive and messy).
    - tialaramex 7y ago
      Commonhold mostly tidies up the situation you describe, by writing it into the Law of the land rather than into individual leases and other paperwork. In the process it gets rid of the lease itself, since the freeholder exists only to further the goals of the Commonhold owners there's no need for finite leases which must be extended. So instead of paying some lawyer quite a lot of money for little more than a bit of photocopying and pasting stuff into forms every so often, that's all built in to a Commonhold out of the box.
kube-system 7y ago
Similar sorts of title issues can happen in the US, but we do a pretty good job of mitigating those before a sale is completed. Do you not have title searches and title insurance in Ireland? It is standard practice in the US to hire a company to research any potential title problems before sale, and additionally, buy insurance to protect against potential issues that might not have been found. https://en.wikipedia.org/wiki/Title_search https://en.wikipedia.org/wiki/Title_search https://en.wikipedia.org/wiki/Title_insurance https://en.wikipedia.org/wiki/Title_insurance
- scandox 7y ago
  We do indeed have title search but instead of being a system for the protection of ordinary persons, it is generally a wringer through which one is pushed by the legal profession. Of course you can sue your solicitor if they failed in their duty during so-called conveyancing (generally a process that takes between 3 and 9 months depending on their level of total incompetence). But then again after 7 years you can no longer sue them...so depends how early these errors are spotted.
tialaramex 7y ago
I'd say on the contrary it's the American system that's needlessly complicating things here. There is no need for deeds to _exist at all_ in 2019. The government ends up as the authoritative decision maker on who owns real property, so rather than pretend these pieces of paper matter, just go to the horse's mouth and use government registration. How does the US still have this quaint document based system like it's still the 19th century? Same reason ordinary working Americans have to fill out a bunch of paperwork for the IRS to tell them what they already know - lobbying. In this case from companies that make their money navigating the complicated property system or insuring against problems with it and know if it was simpler they'd be out of a job. A fancy modern country might deploy a GIS to handle all of this down to the millimetre. For somewhere as old as the USA that's likely to cause more trouble than it saves, but a system like that in England, where registration is done but the question of who own this crack in the shared driveway is not resolved by that registration‡ would simplify the vast majority of property deals in the US. The core trick is to make the registration in the government system de facto the truth - definitely beating any documents no matter who swears they're genuine, this takes some alignment work up front, but you only do it once and most conflicts discovered during alignment will be about land nobody is actually using, scrub land or abandoned mines that six people have identical deeds for as part of a decades old scam, that sort of thing - not homes, because a conflict about who owns your home would already have been resolved. ‡ If you start from deeds drawn up in an era when a boundary might be "From the old oak tree to the river" rather than "Here's the co-ordinates accurate to eight decimal places in the NAD83 datum" then the question of whether the fence put up in 1923 is on Alice's land or Bob's or if it's in fact neatly on the boundary and so belongs to them both is a matter that a court will have to settle if Alice and Bob can't manage to agree it amicably.

dbdjfjrjvebd 7y ago

Leasehold is evil.

tialaramex 7y ago
Historically Leasehold was a necessary evil when two or more owners occupy the same 2D real property, as is common for example with flats (or "apartments" in US English) or where they unavoidably share parts of the property. England (and perhaps other places?) tried to fix this with Commondhold. The idea in Commonhold is pretty similar to Leasehold except that the Freehold of the 2D real property is held by a purpose made entity whose constituents are the owners of the properties contained in the Commonhold, so there can't be some dodgy offshore property holding company involved, between them the people who seem to own the place really do own it outright. Most likely they'll choose to outsource day-to-day management to a company which specialises just as the property holding company does, but as joint owners they have powers to fire that management company or demand to inspect its finances to see everything is done properly, and if somebody thinks they can do better (or has far too much free time on their hands) that's an option with consent of the other owners, it's nobody else's business. Unfortunately Commonhold was not a success. The tax status means that you can sell say 12 flats on Leasehold for £100 000 each, and then also sell the Freehold to a holding company for say £60 000. But if you offer those 12 flats as Commonhold, leaving nothing else to sell, the buyers will be reluctant to part with £105 000 each even though there's a good chance that Freeholder will ask for say £1000pa ground rent, so they'd be clearly ahead after just five years. So as a property builder it made no sense to sell Commondhold properties - the government didn't ban Leasehold for new properties, so Leasehold it is in almost every case.
- dbdjfjrjvebd 7y ago
  Plenty of other countries only have equivalent systems to commonhold. Personally I value leasehold property as worthless. I wonder how many other people do? And how much this contributes to UK people being reluctant to live in flats?
  - rcxdude 7y ago
    The lease has a market value, and a utility, and comes with a pretty robust set of rights. I think it is wrong to write it off as worthless. That said, leases have a lot of variety, and some are better than others (and one reason for a general distrust of new build properties in the UK is newer leases tend to be a lot worse for the holder than older ones, in some cases catastrophically so). Free hold is almost never going to be worse, but lease hold can be just as good for most people.
    - dbdjfjrjvebd 7y ago
      The biggest most important right is to buy the freehold (or extend the lease). I would rather just own a freehold... As another poster pointed out many leaseholds today come with a share of freehold anyway.
- rcxdude 7y ago
  The thing I don't understand about Commonhold is that it seems to be exactly the same as a lot of existing leasehold properties: About half of the leasehole properties I looked at when buying (generally the ones which were 2-4 flats in a building as opposed to a larger block) involved also getting a part share of the freehold. Also, you have a lot of rights as a leaseholder, especially as a group, so you can claim the freehold if the freeholder is charging excessively, so I'm not sure how much the change actually benefits you (If the government wanted to reduce abuses by freeholders, they would focus on making this process less expensive and messy).
  - tialaramex 7y ago
    Commonhold mostly tidies up the situation you describe, by writing it into the Law of the land rather than into individual leases and other paperwork. In the process it gets rid of the lease itself, since the freeholder exists only to further the goals of the Commonhold owners there's no need for finite leases which must be extended. So instead of paying some lawyer quite a lot of money for little more than a bit of photocopying and pasting stuff into forms every so often, that's all built in to a Commonhold out of the box.

kube-system 7y ago

Similar sorts of title issues can happen in the US, but we do a pretty good job of mitigating those before a sale is completed. Do you not have title searches and title insurance in Ireland? It is standard practice in the US to hire a company to research any potential title problems before sale, and additionally, buy insurance to protect against potential issues that might not have been found. https://en.wikipedia.org/wiki/Title_search https://en.wikipedia.org/wiki/Title_search https://en.wikipedia.org/wiki/Title_insurance https://en.wikipedia.org/wiki/Title_insurance

scandox 7y ago
We do indeed have title search but instead of being a system for the protection of ordinary persons, it is generally a wringer through which one is pushed by the legal profession. Of course you can sue your solicitor if they failed in their duty during so-called conveyancing (generally a process that takes between 3 and 9 months depending on their level of total incompetence). But then again after 7 years you can no longer sue them...so depends how early these errors are spotted.

tialaramex 7y ago

I'd say on the contrary it's the American system that's needlessly complicating things here. There is no need for deeds to _exist at all_ in 2019. The government ends up as the authoritative decision maker on who owns real property, so rather than pretend these pieces of paper matter, just go to the horse's mouth and use government registration. How does the US still have this quaint document based system like it's still the 19th century? Same reason ordinary working Americans have to fill out a bunch of paperwork for the IRS to tell them what they already know - lobbying. In this case from companies that make their money navigating the complicated property system or insuring against problems with it and know if it was simpler they'd be out of a job. A fancy modern country might deploy a GIS to handle all of this down to the millimetre. For somewhere as old as the USA that's likely to cause more trouble than it saves, but a system like that in England, where registration is done but the question of who own this crack in the shared driveway is not resolved by that registration‡ would simplify the vast majority of property deals in the US. The core trick is to make the registration in the government system de facto the truth - definitely beating any documents no matter who swears they're genuine, this takes some alignment work up front, but you only do it once and most conflicts discovered during alignment will be about land nobody is actually using, scrub land or abandoned mines that six people have identical deeds for as part of a decades old scam, that sort of thing - not homes, because a conflict about who owns your home would already have been resolved. ‡ If you start from deeds drawn up in an era when a boundary might be "From the old oak tree to the river" rather than "Here's the co-ordinates accurate to eight decimal places in the NAD83 datum" then the question of whether the fence put up in 1923 is on Alice's land or Bob's or if it's in fact neatly on the boundary and so belongs to them both is a matter that a court will have to settle if Alice and Bob can't manage to agree it amicably.