Freehold Flats

weatherwax_2

weatherwax wrote:

Glad I found this thread. Our flat is a merged leasehold and freehold one in London. It's not a block, just a row of terraced houses some of which are wholly owned and some of which, like ours, consist of a downstairs flat and an upstairs maisonette (ours). Many years ago I asked for an extension on the lease and the freeholder offered me the chance to buy the freehold, which I did.

The thing is, my downstairs neighbour is selling up after many years (a nightmare, as she has been the dream neighbour ), but is worried because her lease is'nt long enough. I assume she has been told this, and I can well believe it as I was in the same position before I purchased the freehold.

How do I allay her fears by extending the lease for her? What is the procedure?

Many thanks for any advice.

Edinvestor said

The main point is to figure out how much to charge her. This involves getting a specialist valuer(surveyor) to work it out.

The thing is, I don't want to charge her and I would certainly prefer to avoid her having to line some solicitor's pocket for what (on the face of it) should be a relatively simple transaction. Isn't there another way?

Grateful for any advice.

Ian_W

You don't have to charge her for a lease extension but you will need to have the paperwork drawn up by a solicitor I would have thought. The extended lease would also need sending to the Land Registry so they can alter their records and show the new term of the lease.

If you don't want to charge her suggest she meets the legal costs, which she has to anyway, and get a decent lawyer to draw up a new lease. There are lists of lawyers, set out by region, experienced in this type of work on the link in post #31. Get her to agree an up to date ground rent in the extended lease as it's the new owner who will be forking out for that.

weatherwax_2

Re

Get her to agree an up to date ground rent in the extended lease as it's the new owner who will be forking out for that.

When I bought the freehold in the 80s, there was something about not being able to increase the ground rent (it's £25 twice a year) presumably because that was the state of play with the downstairs lease from the time it started. I take it that it CAN be increased in the event of a new, extended lease being drawn up. The thing is, what would constitute an up to date ground rent?

I have'nt a clue because I've never thought much about owning the freehold as the ground rent was so small.

Ian_W

That might be a good question for a lawyer experienced in these matters. We have a leasehold house with a ground rent of £20pa set in 1971 - according to an RPI calculator I use, inflation alone would give that an up to date value of just under £200.

Try running the figures through this calc at:

http://www.1hclaw.com/data_and_calculators/retail_prices_index.php

Should give you an idea what £50pa in the 80s is worth now.

noddynoo

OK I have exchanged on this property but my solicitor was saying that he thinks that the downstairs leased flat has its own insurance as do we.He is now saying that I need to check that northern rock have to make sure the whole freehold is insured but as it is a bank hol now I can't speak to anyone!I am assuming as they have mortgaged it and know it is freehold that the buildings and content insurance are adequate.Does anyone know if this type of property has different/special insurance requirements?

weatherwax_2

Ian_W wrote:

That might be a good question for a lawyer experienced in these matters. We have a leasehold house with a ground rent of £20pa set in 1971 - according to an RPI calculator I use, inflation alone would give that an up to date value of just under £200.

Try running the figures through this calc at:

http://www.1hclaw.com/data_and_calculators/retail_prices_index.php

Should give you an idea what £50pa in the 80s is worth now.

Oh dear, the calculator could'nt help me. It said 'site admin has been notified'.

weatherwax_2

weatherwax wrote:

Oh dear, the calculator could'nt help me. It said 'site admin has been notified'.

As the above still applies, is there anyone out there who could tell me what £50 (ground rent charge, payable in two lots of £25 in March and September since 1981) would now be worth? My above posts clarify my situation.

weatherwax_2

Anyone?

hazeyj

In shoudl be written in your lease at what rate the ground rent will rise to over the years from the date the lease was first written. hope this helps

Richard_Webster

As a Conveyancing Solicitor :: Personal link removed - FM :: can I cut through a lot of this stuff about freehold flats?

Most of the large national lenders will lend in the situation quoted at the beginning of the thread. The Council of Mortgage Lenders' Handbook deals with the point at paragraph 5.5.3:

Other freehold arrangements
5.5.3 Unless we indicate to the contrary (see part 2), we have no objection to a security which comprises a building converted into not more than four flats where the borrower occupies one of those flats and the borrower or another flat owner also owns the freehold of the building and the other flats are subject to long leases.

It is then just a question of checking to see what your particular lender says about it. Go to: http://www.cml.org.uk/handbook/frontpage.aspx