FAQ Flats, Leases, Freeholds Share of, don't let it do your head in!

onlyroz

Just one bit of advice. Do not buy a council leasehold or you'll end up forking out £££ to pay for a car park on the other side of the estate over a mile away. Or perhaps to pay for an incompetent contractor to paint your windows shut. Or to tell you that, no, you're not allowed a satellite dish, but when you dutifully take it down and ask why every other bloody flat still has a dish you're told "oh we were never actually going to enforce the rule"...

booksurr

propertyman wrote: »

daily bump

it's better if it's not given a daily bump as it's much easier just to post a link to the single entry on relevant questions raised by others rather than randomly hoping people will read the same post each day given how long its terms are.
http://www.bristol.ac.uk/arts/exercises/grammar/grammar_tutorial/page_13.htm

For example, see how GM handles cross referencing to his bibles .

propertyman

There are good reasons for the frequent bump.

benjus

Why don't you delete the old bumps so that the thread doesn't just fill up with bumps...?

propertyman

Brilliant thank you:beer:

Do'h, for not thinking of it.

Wiggs

Thanks propertyman. I am looking into buying a lease on a studio flat to rent out as an investment. The flats/block in not developed yet (off-plan conversion of old BT office block) so I can't check visibly what I will be responsible for and what SC levels will be over time if not to believe the EA 'indicative' numbers.
What key questions should I be asking at this early stage before looking further at the investment? I assume the freeholder will pay and arrange buildings insurance as they own the bricks and mortar?

Cheers.

propertyman

Probably best to start a new thread.

However, the lease will explain the basis of charging and apportionment and the estimated costs are based on plans and the builders specification.

How accurtate that is depends on several factors.

1 How it comes out in practice

2 The accuracy of the costing- some are excellent-mine- and some are "erm I looked at averages for similar properties locally/made it up"

3 Commercial reality - SC is seen as a major outgoing and it irearely understtod that while £x can be compared block to block, the blocks themselves vary as can service levels.

Builders realise that they are in competition with other sites and therefore want to squeeze or delay costs in the SC which leads to surprises after year 1 for the buyer.

4 How the service cpricurement is handled. Builders often use contractors that are sometimes expensive on ongoing work rather than applying the discounting for multiple contracts for various sites. Finding a handyman or mom and pop cleaners can greatly reduce costs as can say local fire alarm companies rather than "Big Fire Nationwide plc" That said systems are often on warranty or proprietary software eg lifts, which means switching is far from easy.

In short short of paying me to look at the specs and drawings its the luck of the draw. £1000 fees for me would be nice but might be better as a contigency on deposit for you.

propertyman

mavisangelica wrote: »

Excellent! Now can I be cheeky and ask if you can do similar about Freehold houses. I have experienced 2 scenarios and am still not sure I understand it. I suspect that people think that if they own the freehold then they think that they do not have to answer to anyone (subject to local planning).

1. Previous house (built 1994) - Shared ownership and leasehold. After 1 year had option to buy full house which we did and the freehold. Freehold document still reads pretty much the same as the lease document (lots of pages) and still clause to pay service charge (don't get me started on the service charge!!)
2. New house (built in the 60s) - freehold. No service charge! but covenants about not extending the property without permission or inserting windows which overlook. Not run a brewery in property. Original people named on lease were the Landowners of the area (duke?) but now a solicitors and a named person.

1 is very much a reality in modern builds but its not new as the london private gardens schemes from the 1800's are proof of. Councils want major cheques from builders to take on roads paths lighting etc and therefore its cheaper to parcel them off to a Man Co and residents to pay for it. Not that you get a lower council tax...


2 Again restrictive covenants and estate management restrictions are not unusual for reasons of privacy. I know one set of houses near a brewery where the original reason on no new windows or extensions was to stop people renting/buying the house and spying on the secret recipe!:rotfl:

mavisangelica

In terms of restrictive covenants, would it not be better for the land to stay leasehold rather than sell the freehold. I think what I am saying is, if the original landowner still wants control then would it not be in their best interests to keep it leasehold. (If they didn't want the hassle of collecting ground rent, could they not change it to a peppercorn rent or a nominal amount.) Is it not better that the 'control' stays with the land?

evs50

Hi everyone


I am currently renting a small house on the Elba estate in Gowerton, Swansea. There has been a 25 year ground rent review on the estate. Most of the properties have been paying £50 and a few larger houses as much as £90 per annum (our landlord pays £50). Our property is a mid-link house worth about 100-105k. There are 3-beds ranging in price from 130-170k and I can't imagine there are many, if any, over 200k. A road about 20 yards away (not part of the site) pay around £12 a year ground rent. Anyway the proposed rates have increased by a lot. Ours would be up from £50 to £604 and many others are multiple thousands. The biggest rise I've heard is £90 to £3200 per annum. Another lady I spoke to living in a semi-detached 3 bed said hers was rising from £50 a year to the equivalent of £43 a week!


I would be interested in people's thoughts on the matter. I have read a little bit about ground rent reviews and generally they seem to be double or triple every 25 years. We have also been looking at a house in the next village which is about the same age as the Elba estate, is a leasehold and has 80 years remaining of a 99 year lease. The ground rent is currently £80 a year but I don't want to find myself in the same boat as the Elba owners in 5-6 years time. Any info, help, thoughts and advice would be most welcome.


James


Here is a story about it:


http://www.southwales-eveningpost.co.uk/Fury-rent-rise-motion-rejected/story-21253389-detail/story.html