Probate query

Lyncroft

My father died in April. I am in a family of 5 (no mother). He owned a flat which I have been living in. The will said the flat was to be sold unless someone wanted to buy it. I was thinking of buying it and we also needed to get a figure for probate so based on a 99 year lease the EAs valuation were all over the place ranging from 415 to 500.

It then transpired that my father had let the lease run down and the lease was in fact 69 years. Based on this we got a proper valuation done by a surveyor which came in at 275. Probate hasn't been granted yet. Other members of the family think that figure is too low.

My query is if I was thinking of buying it what is the figure I should be looking at. Obviously I want lower. I realise the lease will need to be extended. The council won't look at this until probate is granted. Am I looking at the probate valuation or what the valuation is now. This is London so the value has gone up somewhat since April and at current values is probably way out of my scale.

Thanks in advance.

madbadrob

I would get three estate agents or surveyors in and then take an average of the figures they give.

Rob

nom_de_plume

Also, in fairness to the other beneficiaries, I would endeavour to find a likely cost to extend the lease. It's not likely to sit well if you buy the flat from the estate at a low price and manage to extend the lease for significantly less than the difference in values.

Were you living in the flat prior to your father's death and, if so, for how long?

Lyncroft

Thanks for the replies.

I've been there about 4 years.

Looking at the calculator I think it would cost about 45k to extend the lease.

I've been prone to rather let things drift on and let things happen around me when it comes to family so I'm just trying to take the initiative and consider the options before someone tells me what the options are and I'm none the wiser!

TBagpuss

If the first valuation was wrong, because the agent/surveyor wasn't aware of the situation with the lease then that value needs to be rectified.

The executors/administrators have a duty to get the best value for the property so they would have to sell for it's current value, not the value it had in APril.

So, the correct value is the value of the flat now, taking into account the short leasehold. You should get a proper, written *valuation* from a surveyor/valuer, not a market appraisal from an estate agent. A proper valuation should set out the basis of the valuation and provide comparators.

getmore4less

It may be that the best action is for the estate to extend the lease and then put on the open market.


The big issue here is there will be CGT implications if the estate does it.

the other thing to look t is the total value of the estate and the IHT implications of a higher probate valuation.

Lyncroft

Thanks for the replies.

Yes, I was thinking probably best to extend the lease and put it on the market. It will just be too expensive for me to buy. It's been in the family for many years so it's sad in a way. The PO haven't come back with their view on the valuation. It will be above the threshold regardless as my father had other assets.

I suppose the the lower the probate valuation the lower the IH tax but higher the CGT on sale. And vice versa for a higher probate valuation.

Again many thanks for your replies - guess I'll need to find somewhere to live!

madbadrob

Lyn,

Under inheritance laws you could argue for a life interest in the property. There is a section about property and when it cannot be forced to sell because of a will. One of those is when the property has been your permanent address for a number of years which in your case you would fall in to. Obviously this could cause arguments with your family and you may not want to go down this road however if you cannot afford to move you could use this. A solicitor would be required

Rob

Lyncroft

Thanks Rob

Oh Lordy I don't think they'd be impressed with that!

I think to varying degrees they want to help me (they're all set up with property) but understandably want to protect their own position which is fair enough.

madbadrob

Lynn,

To get back to your original question. You would need to obtain three seperate valuations based on the property as it is now and not when it has a 99 year lease on it, that is unless the estate was prepared to pay the costs incurred with re-negotiating a new lease and of course that also depends on whether the freeholder wishes to renew the lease. If the estate isn't willing to pay for the lease extension then buy it at the average price based on the 60+ years value - what would be your share.

I would speak to the others and ask them what they want to do and tbh is their money in the estate to pay for the lease extension? Bear in mind as well you will only get a mortgage based on the lease as it stands now unless this was negotiated first. I would expect the lease to cost approx 20-40k to extend back to 99 years

Rob

Lyncroft

Hello Rob

Thanks for the reply.

It's an LA flat and they've indicated they'll extend it but will only take it further once probate has been granted. I think the others will want to extend the lease (I think theres money in the estate). I suppose the likely outcome is to extend the lease - this would benefit everyone hopefully, though it would mean it would be unaffordable for me.

Thanks again.