Negotiating lower price after the survey

James129

In brief, I had an offer accepted on house subject to valuation and property being freehold.

Estate agency had confirmed with the vendor the property was freehold. But it turns out the property is actually leasehold as my solictor has just received draft contract from the vendor's solicitor.

The vendor's excuse is he was never approached by anyone for ground rent so he thought it was freehold property.

Now the lease is just over 100 years so if I were to buy this and sell it after mortgage term of 25 years, the lease left would be around 80 years which will make it close to un-mortgageable.

So I'll have to spend money to extend the lease.

With the new information coming to light, is it reasonable and fair to ask vendor to drop the price by an amount that would be necessary to extend the lease back to over 100 years after 25 years?

Or shall I propose we meet halfway and I'll pay half towards extending the lease?

Any suggestions and advise is welcome.

GAH

You can ask the vendor to drop the price by whatever you want, whether he accepts is another matter.

The majority of the time it costs more to buy a freehold property than a leasehold, for that absolute reason that you are only ever buying the lease.

As it stands 100 years at present is a decent lease. Would you intend to stay 25 years?

brit1234

Ask for a reduction. You were prepared to pay x for a property on a certain understanding. Now that house isn't what you thought and you will be worse off then you have every right to renegotiate.

botchjob

Worth a try but a 100 year lease is fine and the difference in value between a leasehold and freehold flat is notional. People prefer freeholds but it doesn’t really effect the value unless the lease dips below 80 years or so.

But as they miss described it, no harm in asking to shave a few thousand off.

Cambridge32

Absolutely make a lower offer. Establish who is the freeholder, and find out:
- how much to extend the lease for X years;
- how much to buy the freehold (if possible).

Take this amount of money (whichever you choose) off of your offer and submit this first verbally and then in writing (make it a long-winded letter with as much detail as necessary) to the agent. It is completely unreasonable to advertise a leasehold property as freehold if that is what they have done. They may not accept, so you must be prepared to withdraw your offer and buy somewhere else.