Leasehold purchase - lease length different from that stated by estate agent

alexanderalexander

Hello,

I am buying a leasehold property. The estate agent's particulars stated that there were c. 121 years left on the lease, but now my solicitor has done a search and there are actually a little under 104 years left. We are now quite close to a potential completion date.

Clearly this is a bit annoying, although not fatal to the transaction as I understand that anything over 100 years is generally considered okay for leasehold. However, does anyone have any thoughts on what action I could take (if any)? I have mentioned the issue in an email to the estate agent but I have had no response yet (I did not suggest any solution myself though).

I believe this could raise issues of a breach of the Property Misdescriptions Act on the part of the estate agent, but does this give me any redress? I am not sure that it does (I could probably get the agent in trouble with trading standards or similar, but that just seems a bit vindictive and of no benefit to me, so I do not intend to do that).

Or should I just try to get the seller to chip the price? If so, how much could I ask for? I realise that realistically the difference between the value of a 104 year lease and a 121 year lease is not huge. My offer price was £250k if that helps.

Fire_Fox

Anything over 80 years is easily mortgageable. Did the particulars say circa 121 or just 121? Not the same. Not actually sure there would be any difference in value between 104 and 121 years, have you asked the surveyor that did you valuation if there is? You can try to gazunder or you can ask for the lease to be extended to what you were advised, if you are prepared to wait.

olly300

This is a common problem with leasehold properties and it's due to the seller giving misinformation to the estate agent due to not having the original lease paperwork.

If you read the Estate Agents adverts and pack they gave you, you will find they will have some small print stating that you have to check certain things and that includes the lease length. So you are unlikely to be able to get the EA under the Property Misdescriptions Act.

Having a difference of 16 years left on the lease when the lease is over 100 years in length won't make any difference to the price.

BTW my seller kept insisting there was over 100 years left on the lease as they had a photocopy of the original lease which they gave to me. However because there was a mistake which they put a slip of paper over to correct the year the lease started my solicitor knocked 10 years off until they got the orginal lease paperwork of my sellers' solicitor. It didn't make any difference to the price as it had already been priced for needing some modernisation.

alexanderalexander

Fire_Fox wrote: »

Anything over 80 years is easily mortgageable. Did the particulars say circa 121 or just 121? Not the same. Not actually sure there would be any difference in value between 104 and 121 years, have you asked the surveyor that did you valuation if there is? You can try to gazunder or you can ask for the lease to be extended to what you were advised, if you are prepared to wait.

Thank you for your reply. It did say circa 121 years, but I would suggest that isn't really a substantive difference from saying 121 alone (to my reading circa 121 means somewhere between 120 and 122, given the fact that 121 is not a round number).

I appreciate that there won't be a huge difference in value at the moment, but that said if I (say) sell this property in 20 years' time without having bothered to extend the lease, I would much rather be selling it with 101 years left than with 84 years left.

alexanderalexander

olly300 wrote: »

This is a common problem with leasehold properties and it's due to the seller giving misinformation to the estate agent due to not having the original lease paperwork.

If you read the Estate Agents adverts and pack they gave you, you will find they will have some small print stating that you have to check certain things and that includes the lease length. So you are unlikely to be able to get the EA under the Property Misdescriptions Act.

Having a difference of 16 years left on the lease when the lease is over 100 years in length won't make any difference to the price.

Hello, thank you for your reply. Re the Property Misdescriptions Act, the particulars did contain such a disclaimer as a suggest, but I had a quick look into the legal situation and as I understand it given the wording and location in the document of this particular disclaimer, it is probably not actually legally valid (I am a solicitor so this sort of thing is within my purview, although I don't have any direct experience of property law so I am not an expert on this). That said, I don't see how I could get any benefit from the Property Misdescriptions Act anyway, so this may well be a non-starter.

G_M

alexanderalexander wrote: »

... It did say circa 121 years, but I would suggest that isn't really a substantive difference from saying 121 alone (to my reading circa 121 means somewhere between 120 and 122, given the fact that 121 is not a round number).

you must be joking! To my reading "circa 121" means "the vendors can't remember exactly but are making a guess on the basis that they think it was aroung 125 years when they bought the lease 4 years ago"

The reason you (well, OK you're a solicitor so maybe doing your own conveyancing?) employ a conveyancer is to check all aspects of the Title (like lease).

Fire_Fox

alexanderalexander wrote: »

Thank you for your reply. It did say circa 121 years, but I would suggest that isn't really a substantive difference from saying 121 alone (to my reading circa 121 means somewhere between 120 and 122, given the fact that 121 is not a round number).

I appreciate that there won't be a huge difference in value at the moment, but that said if I (say) sell this property in 20 years' time without having bothered to extend the lease, I would much rather be selling it with 101 years left than with 84 years left.

You can suggest that but I don't see how you can be correct. Circa simply does not mean one year either side and 121 is a round number. If you did any genealogy you would often see something like c.1843, generally denoting up to ten years either way (but this is not set in stone).

Are you likely to hold onto the flat for 20 years and not extend? Would you have offered lower had you known it was 'only' 104 years? If so try to gazunder or insist the lease is extended, your issue is with the seller not the estate agent. And ask your conveyancer why you got almost to completion before he confirmed the length of the long lease.

alexanderalexander

G_M wrote: »

you must be joking! To my reading "circa 121" means "the vendors can't remember exactly but are making a guess on the basis that they think it was aroung 125 years when they bought the lease 4 years ago"

The reason you (well, OK you're a solicitor so maybe doing your own conveyancing?) employ a conveyancer is to check all aspects of the Title (like lease).

Hello - thank you for another response. Now don't get me wrong, I am 100% sure that it was an honest mistake on the part of the seller. I am certainly not accusing anyone of fraudulently overstating the length of the lease! That said, it was the seller who made the mistake, not me, so it is mildly irking that I will be the one who suffers by acquiring a lesser interest in the property than that on which I based my offer. Additionally, I wouldn't say that it is a particularly excusable mistake for the seller to have made -- while I appreciate that the seller may indeed have lost his copy of the lease for the property, it is really rather careless for a leasehold-owner to lose such an important document and not get hold of a replacement!

Anyway, as far as I can tell I have three options:

(i) try to chip the price to some trivial degree;
(ii) try to get some kind of redress from the estate agent due to their breach of the Property Misdescriptions Act (rather unlikely to happen I feel);
(iii) live with my mild irritation and just complete at the original price.

alexanderalexander

Fire_Fox wrote: »

You can suggest that but I don't see how you can be correct. Circa simply does not mean one year either side and 121 is a round number. If you did any genealogy you would often see something like c.1843, generally denoting up to ten years either way (but this is not set in stone).

Are you likely to hold onto the flat for 20 years and not extend? Would you have offered lower had you known it was 'only' 104 years? If so try to gazunder or insist the lease is extended, your issue is with the seller not the estate agent. And ask your conveyancer why you got almost to completion before he confirmed the length of the long lease.

I think what the word circa means is all a question of context and it might turn into a somewhat arid discussion if we were to cover it further (which of course as a solicitor I'd enjoy, but I'm not sure anyone else would!). By round number, I meant that if it had said "circa 100 years" or "circa 200 years" I would have expected a bit more leeway -- 121 is a very specific number for someone to pick if in reality they are very vague about how long is left on the lease! Regarding whether it made any difference to me, I viewed some very similar flats with around 100 years left on the lease, so the purported extra 20 years did make this one slightly more attractive -- although to be honest with you it wasn't the dealmaker/breaker.

As for what I'll do, I reckon I'll probably just try and get a very small reduction in the purchase price, and if the seller's having none of it then I'll probably complete at the original price. Common sense solution, of course, but I thought it worth putting this one to MSE to get some other perspectives.

G_M

alexanderalexander wrote: »

Hello - thank you for another response. Now don't get me wrong, I am 100% sure that it was an honest mistake on the part of the seller. I am certainly not accusing anyone of fraudulently overstating the length of the lease! That said, it was the seller who made the mistake, not me, so it is mildly irking that I will be the one who suffers by acquiring a lesser interest in the property than that on which I based my offer. Additionally, I wouldn't say that it is a particularly excusable mistake for the seller to have made -- while I appreciate that the seller may indeed have lost his copy of the lease for the property, it is really rather careless for a leasehold-owner to lose such an important document and not get hold of a replacement!

Anyway, as far as I can tell I have three options:

(i) try to chip the price to some trivial degree;
(ii) try to get some kind of redress from the estate agent due to their breach of the Property Misdescriptions Act (rather unlikely to happen I feel);
(iii) live with my mild irritation and just complete at the original price.

You would be amazed (clearly - I take it for granted) how many property owners do not have their Title documents.

Some 'lose' them. Some leave them with their solicitors. Some at the bank. Some simply forget they actually have got them. You just have to read this forum regularly to realise many leaseholders barely understand what a lease is, how important it is etc.

As you say - this was doubtless an innocent mistake. True, not your fault. But the point of the pre-Exchange conveyancing process is to verify exactly these issues.

Now that you've verified the truth, you do, indeed, need to make a decisision. Pull out? Try to re-negotiate price? Ignore and continue.

But trying to 'blame' either the agent or seller is a waste of time.

Ivana_Tinkle

Given that your offer was right on the stamp duty boundary, I'd have thought it was pretty likely that, even with the reduced time remaining, the flat is still worth £250k.

This is a really rubbish explanation - someone less knackered will explain it better - but it's often the case that, if the boundary wasn't there, your flat would have been a few grand over £250k, so if something comes up that reduces the value by a few grand, then it's still probably worth £250k.