Leasehold and Solicitors obligations

keanelover

Hi there

Apolgies if this is in the wrong forum, but I have a very expensive and unresolvable issue that has gone on for a while.

I purchased my flat in 2006 and at the time the solicitor didn't mention to me the alarmingly short lease. At the time there was 75 years left and I wasn't given any advise that this could cause me huge expense and leave me with a worthless property. I was told 2 years after I purchsed the flat that selling would be tricky and I now find myself with a flat that is worth around £20k less than what I paid for it (if not more) with no means of finacing the purchase of a lease extension.

I cannot borrow against my current mortgage as its a rented property. I cant afford to borrow the sums invloved (more than £10k eeeek!) and selling at a loss isn't an option!

Should the Solicitor have notified me about this at the time of purchase about the short lease? I find myself in despair and panic about this regularly, I honeslty don't know what to do! A lottery win might help but alas something more realisitic would suffice.

I am single with one modest income, Ideally I would borrow against my mortgage but my bank wont help, I dont have enough LTV to borrow with any one else before anyone asks that question.

Cheers

Richard_Webster

The solicitor should have told you that the lease would need to be extended at some time in the future in order to sell and that could cost a substantial sum. You need to dig out the written report the solicitor sent you before you signed the contract (you did get one?). if you weren't advised you might have a case agsint them.


To be fair at that time most lenders would give mortgages on leases where there would be 30 years left when their mortgage was ended - for most people 55 years. Bristol & West/Bank of Ireland wanted 70 yaers and now Halifax/Lloyds TSB Group have joined them in wanting 70+ years so what wasn't quite so bad in 2006 is worse now for mortgageability.

cattie

Quite few properties ago when I bought my first property, I bought a leasehold maisonette that had 76yrs on the lease & I wasn't warned about this or the problems of reducing leaseholds. When I decided to sell 4yrs later, I sold with no problem & at a very good price. I actually had 2 offers on the same day. But the property was in London, and an area that is popular with young professionals, close to the centre.

If I remember rightly, when I applied for the mortgage, they stipulated that for leasehold properties, at least 56 years needed to remain on the lease.

propertyman

The problem is that while you can get a mortgage and the title and lease are sound,the solicitor and lender are focusing on today and technical aspects relevant to their role acting for you, and assume that you have a basic grasp of what you are buying - ( any) lease, car or flat, comes to an end, they can be extended for an extra sum.

In simple terms the mechanic and bank look at the car and say yes its road worthy, and you can have the loan.

But you have to ask "I know I can sell it in x years, but what about resale value ?"

The same applies to leasehold proprieties.

seven-day-weekend

Why don't you sell your flat now while it is still mortgageable? My son has just bought a flat with a 66-year-lease with a mortgage from Santander. He (we) will probably renew the lease in two years time.

silvercar

The answer is to sell with the price reflecting the short lease or to sell and undertake to extend the lease at the time of sale. The latter approach means that part of the purchase money is used to pay for the lease extension.