Freeholder refusing permission

Jebrelli

Hi all,

I'm in the middle of trying to purchase a leasehold flat, but progress has been slow as the seller and I are waiting for the freeholder to provide retrospective permission for removal of partition walls.

Following a surveyor visiting the property and drawing up a report and new floorplan, today the freeholder (a large private company) offered to provide retrospective permission on the condition that £900 in administrative fees were paid (seller has offered to do this) and the ground rent increased from £50 pa to £250 pa, doubling every 20 years.

Although this seems like a small amount of money I am loathe to agree to this as the flat has a fairly short lease (70 years) and we would be looking at extending this after two years.

From my understanding the ground rent is factored into the calculation for the cost of lease extension as the freeholder's "lost earnings". Is this correct?

What do you think of the offer?

The freeholder has delayed the sale by six weeks already and must surely know that the seller and I want this sorted as quickly as possible.

Thanks for any advice you have, I'm starting to lose hope with this flat.

Doozergirl

Yes, you're right.

Why don't you agree to the £250 if the freeholder sells you the lease extension at the same time.

You don't have to wait two years, it's only if the freeholder says no initially that you have the legal right to force them to extend after two years of ownership.

Jebrelli

Doozergirl wrote: »

Why don't you agree to the £250 if the freeholder sells you the lease extension at the same time.

The seller got a quote for the lease extension before he put the flat on the market - the company asked for £18,000, with ground rent rising to £100 pa doubling every 20 years, with the lease term capped at 99 years again.

We were offered the same deal and thought it was pretty bad. Our plan was to negotiate this after the sale.

Richard_Webster

Don't get taken for a ride. The seller got himself into the mess, he will have get himself out. Buy something else.

CloudCuckooLand

Get the lease extension in the same price you were going to offer...if they decline, there should be plenty more around.

HappyMJ

70 years remaining on a lease for a flat is fine it's not relatively short. It's 29 years old now so maybe built around 1982. I doubt the building will still be up beyond 2081. Consider what buildings are still standing now from 1912 and in good condition? And anyway would you even be alive to enjoy it. I don't think it's worth spending £18,000 on a lease extension. How did they come to that figure anyway it is very high? Buy it if you want it but don't agree to the increase in ground rent keep it at £50 per year let the vendor sort out the mess that has been caused.

Doozergirl

Jebrelli wrote: »

The seller got a quote for the lease extension before he put the flat on the market - the company asked for £18,000, with ground rent rising to £100 pa doubling every 20 years, with the lease term capped at 99 years again.

We were offered the same deal and thought it was pretty bad. Our plan was to negotiate this after the sale.

Erm, this sounds like a freehold who knows how to profiteer. £18,000 capped at 99 years? That's outrageous. You can almost guess where it will be going in two years time and you're asking for another 90.

I'd think very seriously about whether you want to buy it. Very seriously. Because your hands are tied to a large degree with a freeholder who wants to take advantage of you. The cost of a tribunal you don't get back so the choice when faced with a freeholder like this is often 'like it or lump it'.

It's not just the freeholder stuff, it's their choice of managing agent (no doubt very linked to them) and their approach as well on a day to day basis.

Jebrelli

Doozergirl wrote: »

Erm, this sounds like a freehold who knows how to profiteer. £18,000 capped at 99 years? That's outrageous. You can almost guess where it will be going in two years time and you're asking for another 90.

You're right, and they're obviously a very greedy company. It's a great flat but the lease extension (or rather, the lease extension negotiation) has been troubling me since I saw the offer the company made to the seller.

I'm really starting to wonder what sort of company this is.

Doozergirl

Have you googled their name? See what comes up. Some are quite notorious!

Jebrelli

HappyMJ wrote: »

70 years remaining on a lease for a flat is fine it's not relatively short. It's 29 years old now so maybe built around 1982. I doubt the building will still be up beyond 2081. Consider what buildings are still standing now from 1912 and in good condition? And anyway would you even be alive to enjoy it. I don't think it's worth spending £18,000 on a lease extension. How did they come to that figure anyway it is very high? Buy it if you want it but don't agree to the increase in ground rent keep it at £50 per year let the vendor sort out the mess that has been caused.

A 70-year lease is bearable, but it's more the implications this has when I want to sell the place. The property dates from about 1900 and was converted into two flats in the 1980s.

andy.m_2

walk, no, run away.

There are loads of flats available and with the current economic climate there's going to be more and more available.