Do you know where your Memorandum of Staircasing is? Your flat is probably your most valuable asset. So knowing where your legal documents are is essential. Linz Darlington, MD of Homehold, explains why.
When a flat is leased on a shared ownership basis, the lease document spells out the share that has been bought by the flat owner, and the share that is retained by the freeholder.
When the flat owner purchases an additional share – a process known as “staircasing” – the lease isn’t entirely re-written. Instead, a legal document (usually called a ‘Memorandum of Staircasing’) is signed by both parties.
This usually contains wording similar to the below:
Where is this document stored?
Once the staircasing transaction has completed, your freeholder’s solicitor should send your solicitor the copy of the document signed by your freeholder.
The paper copy would either be held in their secure archive or sent to you for safe keeping.
For most properties, the physical documents are less important than the “official copies” held at the Land Registry.
For this reason, a good solicitor would register the document with the Land Registry so it can be held electronically with your lease and any other documents.
What’s the problem?
While it is good practice to register the Memorandum of Staircasing at the Land Registry, this isn’t strictly required.
If the document isn’t at the Land Registry, and the physical copies of the documents go missing, proving that you have staircased the property will not be an easy task.
We have had two lease extension cases where there was no record of the Memorandum of Staircasing either at the Land Registry or in the owner’s records.
How do I check if I have a Memorandum of Staircasing?
The first place to check is your own records. If you have a file of documents relating to your flat, then check there. It may be that the Memorandum of Staircasing has been affixed to the back of your lease. You are looking for a final version of the document, which has been signed or sealed by your freeholder.
If you haven’t got these documents, then you could make an enquiry with your solicitor or ask them to send you their file on your property. If they have scanned the document and retained only an electronic copy, ask them to print it and certify it and send you the physical certified copy.
You can also check with the Land Registry. You can purchase the title register to your property via the Land Registry website for £3.00. This may include information relating to your staircasing – an example is shown below.
Just because your Memorandum of Staircasing is not explicitly listed on your register doesn’t mean it doesn’t exist – but further investigation might be needed.
You could use a solicitor to conduct further investigation or speak with the many companies on Google who will offer to investigate your deeds for a fee.
What do I do if I can’t find the Memorandum of Staircasing?
If you know that your flat is fully staircased (i.e. you do not pay any rent) but you can’t find the deed, then you have two options
Option 1:
Approach your freeholder and ask them if they have a copy of this document.
If they do, then you should register this one with the Land Registry.
If they agree the flat is fully staircased, but don’t have the document, then you need to clarify the position. A letter or email from them is unlikely to satisfy a future buyer of your flat, so you should instruct a solicitor to rectify the situation. This might include organising a replacement Memorandum of Staircasing or a Deed of Variation of your lease to clarify the ownership position.
The disadvantage of the above approach is that it essentially “tips off” your freeholder that you don’t have the documents to prove full ownership of your flat. While I like to think that most housing associations wouldn’t set out to be difficult about this, they may be slow or inflexible when it comes to resolving the issue.
Option 2:
Option 2 is to do a statutory lease extension. If a flat has had a statutory lease extension, it shows that you no longer pay rent to the freeholder and resultantly the flat must be fully staircased.
As a result, if you make a claim for a lease extension and your freeholder admits your right to extend at a fair premium, they are also essentially admitting that your flat is fully staircased.
Where we have done this we have also asked the freeholder to add additional wording into the legal document for the lease extension which clarifies the position that the flat has been staircased.
Most housing associations don’t ask to see the Memorandum of Staircasing when you make a lease extension claim. Even if they did – and you were unable to provide it – they would be quite unlikely to frustrate your claim if their records show that you are a 100% owner.
This is not a risk-free option. If your freeholder refuses to admit your right to a new lease or attempts to charge you a premium for staircasing again at this stage, you could find yourself in costly litigation where you would have to prove you have fully staircased your flat.
Conclusion
Your flat is probably your most valuable asset. Knowing where your legal documents are is very important and a Memorandum of Staircasing is frequently overlooked.
Please ensure you have these documents to avoid any issues when selling, re-mortgaging, or extending the lease.
If you think your documents are with your solicitor, I recommend asking them for them now. It’s a lot easier to get these documents from a sale from four or five years ago than 14 or 15!
If any of your documents are not registered at the Land Registry, it is worth the financial cost of asking a solicitor to register these for you. This way you know that these have been accepted by the Land Registry, and proof of ownership and will be available from them in the future.
Option 2 updated 29 March 2023.
Linz Darlington is Managing Director of Lease Extension Specialists, Homehold.
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It should be very easy to register a memorandum of staircasing, especially where you have re-mortgaged with another lender to purchase the remaining shares in the property. Do check your title document is correct when you receive it back from your solicitor after completing the staircasing. If it is not on the title, better to strike whilst the iron is hot and ask them to ensure it is registered against the title.
If you have paid monies out of your own pocket straight to the housing association – it is worth contacting a solicitor to ensure the document is noted at the Land Registry so that it is there on public display and will avoid any confusion if and when you come to sell.
Thanks, Zahrah!