Leasehold Nightmare

ledwards26

Hi All,

I am wondering if any of the property experts on here could help me out please.

Me and my partner have recently found out the property that we believed was freehold (Agents Dictated This To Us, and we have proof of emails between me and the agent) is now leasehold with only 57 years left on the lease.

As we were only 2 / 3 weeks away from completion we are really upset with a £1000 already been spent, I have spoken to the solicitors to see if the current vendors would like to buy the freehold on our behalves and we would then continue to purchase the property.

Has anyone on here experience anything similar with regards the purchasing a freehold prior to completion and exchange of contracts or there experience of buying a freehold on their property, and typically how much does the whole process take as the internet from research varies massively.

Property Value (£176,000 with 57 years left on the current lease, and the current ground rent of £50 per year)


Any information would be greatly appreciated :j

cattie

Is this a flat or a house? Flats are always leasehold.

An ea can only ever go by information supplied by the vendor, they don't get to see any of the documentation setting out how long a lease is for or if the property is freehold or leasehold. In saying that, any ea with a pea for a brain would know a flat must be leasehold & can't be freehold.

One of the reasons you employ a solicitor when purchasing property is to check out & confirm such things.

Full information regarding owning leasehold property, extending leases & buying freehold can be found here. http://www.lease-advice.org/publications/documents/document.asp?item=11

It's a government funded agency dealing with all aspects of residential leasehold property, including buying the freehold or extending the lease.

A lease with less than 80 yrs remaining is much more expensive to extend or acquire the freehold of than one with 80 or more years remaining.

da_rule

The seller will probably not own the freehold. What sort of property is this? Flat/House etc?

Also, the contract (with the solicitor) you signed would have said leasehold. Also, is the mortgage company (if you have one) know this is leasehold?

princeofpounds

You say you were 2-3 weeks away from completion. Just to be sure, you have not actually exchanged yet? (I should imagine not, but stranger things have happened)

Leon_W

A 57 year lease can be a problem. If you lived there for 20 years and tried to sell with a 37 year lease it would be practically unmortgageable. If you can extend the lease for peanuts no problem.


The property would revert to the freeholder on expiry of the lease so extending the lease gets more and more expensive the longer you leave it.

ledwards26

da_rule wrote: »

The seller will probably not own the freehold. What sort of property is this? Flat/House etc?

Also, the contract (with the solicitor) you signed would have said leasehold. Also, is the mortgage company (if you have one) know this is leasehold?

Sorry for not supplying enough information, the property is a house, we have not exchanged yet luckily !!

The estate agent after we received the contract saying it was a leasehold, did still say it was a freehold until i told him to investigate further and his response was "Ohh i was 99.9% sure it was a freehold" :mad:

hazyjo

Buying something with a 57 year lease will be problematic and most won't lend on it.

Best route is what you said - vendor to extend and you to buy property. You might find yourself having to wait two years to extend otherwise - and that will more than likely cost even more.

ALWAYS ask solicitors NEVER EAs with regards to something so important. Half the time they'll tell you what you want to hear, the other half won't understand what they're talking about (okay, there are exceptions, I know!).

If it's a house - make sure you aren't shortchanging yourself. A lot won't buy them leasehold (in some areas it's common, but not generally). I wouldn't buy a fully leasehold house (would buy a freehold house if it had a leasehold separate garage or something - have done before, and it's common on new estates).

Jx

ledwards26

Leon_W wrote: »

A 57 year lease can be a problem. If you lived there for 20 years and tried to sell with a 37 year lease it would be practically unmortgageable. If you can extend the lease for peanuts no problem.


The property would revert to the freeholder on expiry of the lease so extending the lease gets more and more expensive the longer you leave it.

I have read also, is it up to the freeholder on the duration of extension i.e. if i wished to extend it for 999 years do i have the right to extend for this length?

ledwards26

hazyjo wrote: »

Buying something with a 57 year lease will be problematic and most won't lend on it.
Jx

I have been in contact with my mortgage advisor and they have said they won't allow anything on leasehold unless it has 50 years left after the mortgage has been paid.


My only concern is why hasen't the current residences not bought the freehold prior ..

da_rule

ledwards26 wrote: »

I have been in contact with my mortgage advisor and they have said they won't allow anything on leasehold unless it has 50 years left after the mortgage has been paid.


My only concern is why hasen't the current residences not bought the freehold prior ..

Perhaps the freeholder doesn't want to sell, or it could be an 'absent landlord'. The title documents (which you solicitor should have) will have the freeholders information on them. You could try contacting them, but it could all take some time to resolve.

Jenniefour

OP, as well as above, vendors might not have bought it because they could not afford to. General rule is that the shorter the lease the more it costs to extend.