Freeholder refusing permission

DVardysShadow

Jebrelli wrote: »

So, a bit of an update.

Yesterday I put forward two offers for the seller to make to the freehold company - one to extend the lease, the other to purchase the freehold outright.

Today the seller's solicitor replied with the original lease offer (£18,000 to extend to 99 years) made by the company last year. They said they won't approach the company with our offer as there is already an offer on the table.

They also think it is inappropriate of me to try to negotiate "at this late stage".

How can I persuade them to put the offers forward?

Thanks for any suggestions - I'm taking everything on board.

Sometimes these companies use words designed to back you into a corner ....

Jebrelli wrote: »

Thanks, you're right. I've just drafted an email to my solicitor saying that the seller must renegotiate the deal, otherwise I'll withdraw.

Your solicitor should write along the lines of

Dear <Vendor's solicitor>

Our client notes your point that it is a late stage to renegotiate, but would wish us to remind you that it is only too late to negotiate once contracts are exchanged...

Jebrelli

sooz wrote: »

So the only offer you have for increasing the lease costs you nearly £1000 (more once you factor their legal fees in) per year for each extra year on the lease. And you only get back up to 99 years! :eek:

Who are the freeholders?

When you put it like that...!

Not sure I'm comfortable putting the company name up while we're trying to negotiate, but if I pull out I will.

sooz

My maths is out. It's around £620 per year (plus their fees). And then add on the extra ground rent costs - of £100 to £250 depending on what the vendor agrees with the company about that missing wall.

Jebrelli

DVardysShadow wrote: »

Sometimes these companies use words designed to back you into a corner ....

Oh, they're definitely trying to back me into a corner.

Just had another email from the seller's solicitor: apparently if I don't accept the current terms by Friday the seller will put the flat back on the market.

Doozergirl

Jebrelli wrote: »

Oh, they're definitely trying to back me into a corner.

Just had another email from the seller's solicitor: apparently if I don't accept the current terms by Friday the seller will put the flat back on the market.

I'd ignore that comment.

Write again asking for what it is that you've asked for and remind them that it is their clients own fault for not getting this permission sorted that makes the lease extension such a big deal as well now. People should be ready to sell when they hit the market, not foot stamping when they haven't sorted themselves out and you're simply trying to do your due diligence.

You're trying to buy somewhere and you're trying to do it properly. If they want to sell, they shouldn't obstruct.

They are going to get this with almost anyone you know. It used to be incredibly easy in the boom to pass over 70-80 year leases because the market was so fraught. It's different now when people are concerned about how the lease affects value when values aren't rocketing anymore.

Ulfar

It sounds like the company have bought the freehold and are milking it for everything they can hence the vendor is selling.

With the extension figure being quoted which seems very high the leaseholders would surely have gone down the route of buying the freehold. At this point I think you have zero chance of getting the freehold as the other leaseholder isn't interested or even if they are the company won't sell it.

I would now be insisting that you want the freehold purchased not an extension. At which point they will say no and put it back on the market, which means in my opinion if you did buy you won't get the freehold no matter how much you want it.

Service charges can be very expensive, I certainly wouldn't allow a renegotiation of the ground rent as this effects purchasing the freehold a lot, the 80 years is also significant when it comes to purchasing a freehold.

Jebrelli

I called up the EA today after the 12pm deadline passed as I hadn't heard anything since Wednesday. Instead of putting our offers to the freeholder, the seller is now having a surveyor come round to value the property and estimate the likely cost for a statutory lease extension. Once he has that figure he plans to approach the freeholder with our private offer, so that if the freeholder turns it down the seller can back up our offer with some evidence - and threaten them with a LVT.

I'm still puzzled as to why the seller won't even try to forward our offer though. What difference does it make to him?

As an aside, until my email on Wednesday I don't think the seller knew he actually had the right to a statutory extension - or knew that much at all about owning a leasehold property. The issue with the wall removal indicates as much - he bought the property after the walls had been taken down but thought the floorplan in the lease was a mistake.

Ulfar

The more I hear the more it becomes apparent that you aren't going to get the freehold for whatever reason.

As I stated previously I would not buy this flat if the ground rent terms are changed because it makes extending the lease and buying the freehold much more expensive.

Have you been provided with the last few years service charge accounts, the current years accounts and if there are any large maintenance projects planned. If you get accounts for before the freehold was sold and after it will give you an indication of what the service charges are and how much profit the freeholder is trying to extract.

Jebrelli

Ulfar wrote: »

Have you been provided with the last few years service charge accounts, the current years accounts and if there are any large maintenance projects planned. If you get accounts for before the freehold was sold and after it will give you an indication of what the service charges are and how much profit the freeholder is trying to extract.

As the freehold consists of only two flats the management of the building has been handed to the residents, so there's no service charge - only ground rent. As far as I am aware, this was the way the building was managed before the current freeholder took over too.

Jebrelli

Another update!

The freeholder is currently considering a private offer from me to extend the lease back to 99 years.

But an issue related to the wall removal has cropped up. After discussing the flat purchase with a friend (a builder specialising in rennovations) at the weekend, he said that the reason the partition walls may have been there in the first place could be because of fire safety regulations.

He suggested going to the building regs drop-in desk at the local council with the current floorplan, as they would be able to say whether the layout conformed to building regs. We did this during the week, and the officer on the desk said the walls needed to be in place to give the flat above an escape route through the communal hallway to the front door in case of a fire in the ground floor flat's lounge.

So not only is the flat in breach of lease, it's also in breach of fire safety regs.

The flat has been surveyed three times for various different reasons - why did this issue not come up before now? How is it that the only reason we found out about this is because we happened to be talking to a friend?

I'm expecting the freeholder to turn down the private offer for the extension - if/when they do, I think I've got a pretty good reason for pulling out now.

I'm just not sure how I should tell the seller about the wall issue.

One positive aspect of this whole thing - the council officers were brilliant.