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Buying Flat, 950yr lease need advice

dimension7
Posts: 44 Forumite
Hello money savers,
There is a 2 bed flat near where I live which I am quite interested in primarily due to price. The price has been dropped twice. I'm FTB. But there are some issues that I find a bit worrying.
Internally the flat has not been modernized for ages, but I'm ok with that, worse case, I will have to throw money at making it look good. I worry that if there are issues with the lease/freeholder I cannot fix those easily.
Estate agent was not clear if the freeholder is private landlord or its a lease owned/operated by the residents themselves, i.e. they all put money in a pot for a rainy day (shared freehold). Estate agent deflected the question saying my solicitor should find out, they don't know.
[STRIKE]Sub-letting is allowed by lease says estate agent. Seller is a church who only intermittently use the property for their staff to stay overnight or few days.[/STRIKE]
Your thoughts/suggestions will help. Thanks.
Update
Found that out of the 12, 6 flats are let out. Remaining flats did not answer door/were not home. Some tenants are social housing rest are privately renting.
From land registry obtained title. I dont understand what most of it means the registered owner and proprietor is a church. Title is a good leasehold. The title is all too full of legal jargon for me to understand.
There is a 2 bed flat near where I live which I am quite interested in primarily due to price. The price has been dropped twice. I'm FTB. But there are some issues that I find a bit worrying.
- [STRIKE]The flat has no gas connection, electric only with immersion water heater for hot water. No central heating. Double glazed. How bad will the heating bills be?[/STRIKE]
- The flat has 950 yr lease, does this mean the landlord is not private and this is a shared freehold?
- The annual maintenance charge is £1200 and annual £30 ground rent. There are 12 flats in the block but the grounds and the common areas look tatty. Makes me wonder where all the money is going?
Internally the flat has not been modernized for ages, but I'm ok with that, worse case, I will have to throw money at making it look good. I worry that if there are issues with the lease/freeholder I cannot fix those easily.
Estate agent was not clear if the freeholder is private landlord or its a lease owned/operated by the residents themselves, i.e. they all put money in a pot for a rainy day (shared freehold). Estate agent deflected the question saying my solicitor should find out, they don't know.
[STRIKE]Sub-letting is allowed by lease says estate agent. Seller is a church who only intermittently use the property for their staff to stay overnight or few days.[/STRIKE]
Your thoughts/suggestions will help. Thanks.
Update
Found that out of the 12, 6 flats are let out. Remaining flats did not answer door/were not home. Some tenants are social housing rest are privately renting.
From land registry obtained title. I dont understand what most of it means the registered owner and proprietor is a church. Title is a good leasehold. The title is all too full of legal jargon for me to understand.
(03.04.1970) Short particulars of the lease(s) (or under-lease(s)) under which the land is held:
Date : 1 December 1964
Term : 999 years from 25 December 1961
Rent : £15
Parties : (1) Donald Smith Limited
(2) George Rushton
The landlord's title is registered.
0
Comments
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You can find the lease information from landregistry for £3. Or you could ask the neighbours.0
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Hello, I'll try and answer these questions in turn;
1. Electric heating can be expensive dependning on the type of system. How old is the property? Does it have double glazing and insulation?
2. 950 year lease sounds like it is a share of freehold but I would ask for the Estate Agent to clarify.
3. If it is share of freehold the money may be going in to a 'sinking fund', which is a fund set a side for maintenance. However this is most likely going towards a property management company (either the landlords, or through the share of freehold). In which case I would be concerned the common parts may be facing a large bill!
4. Don't get fobbed off by the Estate Agent, get them to work for their comission. Tell them you are genuinely interested and would like to make an offer but before I do please can you find out if it is share of freehold or whether it is leasehold from the vendor.0 -
1. Ask the seller for copies of the last couple of electricity bills.
2. No, you will need to check the freehold title to find out who the freeholder is (or ask the seller or your solicitor). But it is unlikely that the seller is co-owner or a shareholder in the freehold, as estate agents usually like to use this as a selling point.
3. You will be provided with service charge statements and accounts as part of the legal checks. These will show what they use the service charge for, whether they are planning to do any major works in the near future and if they are holding a surplus of funds to pay for these.0 -
SecondTimeBuyer wrote: »Hello, I'll try and answer these questions in turn;
1. Electric heating can be expensive dependning on the type of system. How old is the property? Does it have double glazing and insulation?
2. 950 year lease sounds like it is a share of freehold but I would ask for the Estate Agent to clarify.
3. If it is share of freehold the money may be going in to a 'sinking fund', which is a fund set a side for maintenance. However this is most likely going towards a property management company (either the landlords, or through the share of freehold). In which case I would be concerned the common parts may be facing a large bill!
4. Don't get fobbed off by the Estate Agent, get them to work for their comission. Tell them you are genuinely interested and would like to make an offer but before I do please can you find out if it is share of freehold or whether it is leasehold from the vendor.
Estate agent was unwilling to answer question about lease. Tried to explain me what leasehold was, which I already know.
Seller is a church who only intermittently use the property for their staff to stay overnight or few days.0 -
You need to know who owns the rest, if they fall in they a housing association trusts hands and they rent them out as social housing, the value is wiped out and you live in a hell hole.
Flats are goldmines in rental terms, unless subletting is prohibited by lease you need to be very careful.Be happy...;)0 -
dimension7 wrote: »The flat has no gas connection, electric only with immersion water heater for hot water. No central heating. Double glazed. How bad will the heating bills be?
Could be expensive depending on what the insulation is like. Electric heating is always more expensive than gas central-heating but it doesn't have to substantially more.- The flat has 950 yr lease, does this mean the landlord is not private and this is a shared freehold?
- The annual maintenance charge is £1200 and annual £30 ground rent. There are 12 flats in the block but the grounds and the common areas look tatty. Makes me wonder where all the money is going?
Estate agent was not clear if the freeholder is private landlord or its a lease owned/operated by the residents themselves, i.e. they all put money in a pot for a rainy day (shared freehold). Estate agent deflected the question saying my solicitor should find out, they don't know.
This is not a question which an agent can be expected to answer. If they gave one I wouldn't be prepared to trust it anyway. These are matters which a conveyancing solicitor would be checking.
If you want an answer to to the questions about the estate management, service-charges or anything else, you should be asking them of the current owner.0 -
spacey2012 wrote: »Flats are goldmines in rental terms, unless subletting is prohibited by lease you need to be very careful.
Sub-letting is allowed says estate agent. Because they know some other flats in the block are let out.0 -
1) E7 Storage Heating will cost you about the same as gas CH. It is however much less convenient. But if your bills are high because of poor insulation they will still be high with gas CH.
You need to ditch underfloor electric it is norotiously wasteful.
2) No a 950 year lease does not mean that he LHs have share of freehold and manage themselves. The two things are not connected. You can have short leases managed by the residents and you can have long leases managed by the Freeholder.
You need to push the agent on this. He will not get get to completion without finding out the answer to the status of the lease/mamagement co so it is pointless him sweeping it under the carpet today
3) As per previous answer you should expect to see previous years' accounts as part of the conveyancing process. This will enable you to see if the money is well spent or not0 -
Ok I have been to the property and rang the bells of most flats. What I found was the 50% didn't answer the door and the curtains were drawn, so probably no one was in. The rest were tenants, not leaseholders. I could not locate a single flat owner/leaseholder. All flats that answered were rented out. Some of them are on social housing so they had no idea about bills or rent as it was all paid for by whoever, they didn't care. All tenants claimed that their landlord was private, not housing association.
I think that the tatty condition of the common areas is explained off because no one cares, the dwellers don't care as they rent and the owners don't care as they don't dwell at the property.
I could not find out how the lease is managed etc.
How does the above situation affect the flat price? The person who paid his rent himself said he paid £500 pm excluding bills.
Overall the tenants were ok, except for one woman who slammed the door on my face, but she was in the adjacent side ground floor far from the flat on sale.0 -
dimension7 wrote: »Hello money savers,
There is a 2 bed flat near where I live which I am quite interested in primarily due to price. The price has been dropped twice. I'm FTB. But there are some issues that I find a bit worrying.- The flat has no gas connection, electric only with immersion water heater for hot water. No central heating. Double glazed. How bad will the heating bills be?
- The flat has 950 yr lease, does this mean the landlord is not private and this is a shared freehold?
- The annual maintenance charge is £1200 and annual £30 ground rent. There are 12 flats in the block but the grounds and the common areas look tatty. Makes me wonder where all the money is going?
Internally the flat has not been modernized for ages, but I'm ok with that, worse case, I will have to throw money at making it look good. I worry that if there are issues with the lease/freeholder I cannot fix those easily.
Estate agent was not clear if the freeholder is private landlord or its a lease owned/operated by the residents themselves, i.e. they all put money in a pot for a rainy day (shared freehold). Estate agent deflected the question saying my solicitor should find out, they don't know.
Sub-letting is allowed by lease says estate agent. Seller is a church who only intermittently use the property for their staff to stay overnight or few days.
Your thoughts/suggestions will help. Thanks.
How long is a piece of string with the energy bills, varies massively depending on your lifestyle habits, the type of heaters and the insulation of the property. Electric only is standard in newer builds and conversions.
Putting the money away for a rainy day is a 'sinking fund' and that can be done with any type of freehold arrangement, just depends on the provision in the long lease. It does not denote share of freehold, these can be just as difficult to manage or live in as leasehold only with a decent freeholder if you have broke or awkward or absentee landlord neighbours.
Do not trust the estate agent on subletting, check the long lease for yourself. Other flats being let out is totally meaningless, many landlords completely ignore clauses in the long lease. See the entry at land registry for clues on who holds the freehold.
Emboldened is standard fobbing off technique often used on young or inexperienced buyers, don't let them patronise or manipulate you. If you submit an offer do so in writing clearly stating your strong position and with a long list of questions for the vendor. Be firm and use the 'broken record technique' with the agent: you don't want to pay a solicitor if there are obvious things that are deal breakers for you. Address your letter to the vendor asking for a written response but send via the estate agent.
Living in a building that is largely tenanted has it's own problems, few of the landlords care about the state of the common parts they just care about the service charge being low. You will be on your own fighting to get the common parts decorated. Some tenants are great others are not, what is the sound insulation like?
Maybe contact Environmental Health and the Antisocial behaviour unit at your local council, they may be able to give you an idea if there have been any ongoing noise or other complaints. Do also formally ask the vendor about any disputes or complaints about the neighbours.
£1200 per annum service charge can easily be spent on little that is visible in a small block because there are no economies of scale. Is there a lift or are the common parts heated? Are they paying for grounds maintenance, window cleaning or internal cleaning from private contractors but that is being done shoddily? Does that figure include ground rent and buildings insurance? Insurance went up LOADS last year due to the flooding, yes even in blocks that are at zero risk of floods.Declutterbug-in-progress.⭐️⭐️⭐️ ⭐️⭐️0
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