Buying a short Leasehold flat & dealing with an Absentee Landlord

Matt_London

Afternoon all,

I am in the process of buying a 1st floor repossession leasehold maisonette.

My offer is £250k - however following a valuation and survey it has become apparent that there is only a 66 year lease on the property together with an absentee landlord.

The property has since been valued at £225k and the exterior is in a poor condition.

The ground floor flat had a new lease granted in 2000 so doesn't have the issue of extended the lease - just the absentee landlord.

The lease for both flats state that the leaseholder is responsible for half the repairs to the house.


A few questions that I would appreciate advice on:

1) The Estate Agent in my opinion is negligent as they advised me the lease was 99years - what can I ask for to be compensated for if I pull out of the deal? (I was thinking survey/valuation as a minimum).

2) What happens if the Estate Agent doesn't agree to refunding my money - what route would I have to go down?

3) If I proceed with the flat - am I within my right to offer lower than £225k based on the additional lawyer fees I will have to contend with - and if so could anyone give me a figure as to what these lawyer fees may be?

4) What are my options in regards to dealing with an absentee landlord (especially if they can't be contacted)? - for example is it possible to try and gain ownership of the freehold in conjunction with the ground floor flat?

5) If I do manage to extend the lease I am concerned that the landlord will not pay their half of what will be some fairly extensive repairs to the roof etc - what is the best way to tackle this issue? (apart from using it as a negotiating tactic while looking to extend the lease). I want to avoid having to resort to legal means if at all possible.

Thanks for your responses in advance.

Kind regards,

Matt

AlexMac

There's stacks of stuff on the web (including DirectGov) about
-the automatic right to extend leases (which may require you to have owned for 2 years),
-the reduction in the flat's value if the lease is under 80 years, and whether lenders will approve loans on shorter lease periods (ask your own lender) and about
-your right to buy the joint freehold if a majority of leaseholders agree (so I assume you'll speak to the other leaseholder to confirm they're game, and also ask if they extended or inherited the 2000 lease which probably lasts the usual 99 or 999 years ?)

So you are well within your rights to haggle from an informed position on a sum lower than £225k- if as you say it's a repossession and assuming you've not bought at auction, I assume the owning lender will be happy to dump it at bargain rate. And especially as, if you say, there has been the serious matter of 'misrepresentation' by the agent.

Legal costs for a purchase can be anything from a couple of hundred from an internet 'cowboy-conveyor belt' conveyancer, to the £900 plus disbursements (search and registration fees from £100-400, plus of course, 'Stamp Duty' tax) that I paid last autumn when we bought. But I assume that they/you've not incurred much cost yet, unless your lawyer has already initiated planning, environmental or other searches and paid fees?)

As regrds 1&2, I'm not optimistic; you need to ask his trade body about this or any ombudsman/appeals system, assuming he's registered (and especially given the misrepresention), but I doubt he'll want to compensate and in the absence of Government regualtion of EAs (weird, eh?) it's probabaly not worth suing.

3- I think I cover above, as I do a bit of 4 & 5, but the issue of an absentee landlord is a bit tricky- as their major responsuibility is to ensure th structure is insured! No decent solicititor will let you complete without checking this and a number of other standard 'freeholder enquires' (any ground rents or annual charges, what arrangements are in place to maintain or repair the roof, externally redecorate, any planned works, wheter there is a 'sinking fund' already in place for this or outstanding debts for past repairs, etc).

Your Q5 assumes that 'the landlord' pays for repairs. It's not usually like that, as most leases say that the landlord (the freeholder) will charge the 'tenant' (i.e. you, the leaseholder) for insurance, repairs and possibly a management cahrge for doing this on your behalf. So unless there is already a pot of money- a sinking fund- from past leaseholder contributions, you and the guy downstairs will have to share the cost of bringing the exterior up to scratch; another reason to contact them. If they are sensivble, they'll welcome someone who can join them in sorting the property out and adding to its long-term value. If not, or if they've never thought about it (which seems unliklely) they may find it hard to understand why they should help fund decoartions to 'your' externals- or the roof (just as you would be 50% liable if they had rsising damp- again assuming a lease clauses)

Drying up Good luck

Matt_London

Alex,

Thanks for the reply - the lease on both properties mentions the landlord is responsible for half of the repairs.

It has become slightly more complicated as I spoke to the leaseholder on the groundfloor flat yesterday and her solicitors couldn't find the landlord and she has been advised to apply for the freehold...

Matt

propertyman

Agent; You would have to prove that there was a description or misrepresentation- sadly the attitude to leases and lease length of the average agent is
" Lease, whatever- look at the view, can I sell you a mortgage. mate"

Lease and Freehold: Where the landlord is absent you can apply to the Court to determine
-lease extensions after 2 years
-aquisition of the freehold
-right to manage

The latter is important, if the freeholder is responsibility for repairs and leaseholder reimburse them, then you, your solicitor and the mortgagee will want to know there are adequate arrangements in place.

You saying you will do it is not enough.

RTM allows you to quickly take control between you and can then be the means to acquire the freehold

Price: If your valuation is based on 66 years then that is a fair indication of the price you should be paying, bearing in mind that with an absent landlords most purchasers will be advised to back out and some lenders will not lend.

First call your solicitor. and read

http://www.lease-advice.org/wizard/?step=67

cattie

Estate agents never know the true length of a lease as they don't get to see the paperwork relating to it. Many owner vendors lie about the length of the remaining lease as they feel they can hook more interested parties in this way. It's only once a solicitor gets the paperwork that the truth about the lease gets revealed.

Any estate agents blurb will carry a warning that they cannot confirm details regarding things to do with a lease along with a warning that services such as electrics etc are not tested and for a purchaser and their solicitor to get these things sorted out before proceeding with purchase.

Richard_Webster

Why walk into a mess that will costs a lot to sort out?

Having various legal rights is all very well - but think about the cost, hassle and stress involved.

propertyman

cattie wrote: »

Estate agents never know the true length of a lease as they don't get to see the paperwork relating to it.

With which I take great exception.

The length of the lease is a huge determinant of value and the ability to get a mortgage. It is fundamental to what is being sold!

For £4 the information is available to all at HMLR. EA's should know that. If they dont then you are dealing with a muppet, houses today, "fries with that" tomorrow.