Offered freehold by landlord.

[Deleted User]

Hi,

I have had my freehold offered to our 4 block converted house for £15000.(obviously legally for the 2 months but this is nearly up.)

Personally the other tenants cannot afford it and all leases are 124 years left.

I would like to know what the freeholder is going to do with it now.

Maybe to auction?

How would I find out?

Ask the freeholder myself or the management agency?

If it went to auction I believe I may get a substantial discount.

Any advice?

Thanks

Chris

Doozergirl

The freeholder is not allowed to sell to anyone else for less than they offer it to you for, therefore, if it were auctioned, the reserve should be the lowest price you can negotiate.

You can negotiate, of course.

[Deleted User]

Doozergirl wrote: »

The freeholder is not allowed to sell to anyone else for less than they offer it to you for, therefore, if it were auctioned, the reserve should be the lowest price you can negotiate.

You can negotiate, of course.

OK got you thanks Doozergirl.

So best not to negotiate or he could sell for £12k if I agreed to buy but pulled out?Is that what you're suggesting?

If I don't negotiate he cannot sell for less than the £15250 that has been offered?

Doozergirl

Unless they reduce the offer of their own volition...

[Deleted User]

Doozergirl wrote: »

Unless they reduce the offer of their own volition...

I presume an offer on there own volition to myself first?

eddddy

The Landlord and Tenant Act 1987 / Housing Act 1996 specifically defines two ways of selling the freehold.

Very briefly, they are as follows:

1. On the open market.
The freeholder must offer the freehold to leaseholders first (it sounds like your saying they've done that), and if the leaseholders decline, then the freeholder can to sell to anyone else on the same terms.

If, for example, it doesn't sell and they want to reduce the price - they have to re-offer it to the leaseholders again at the lower price.

2. By Auction
The freehold is put up for auction, but can only be sold conditionally. Whatever price is achieved at auction, the freeholder must then give the leaseholders the right of first refusal at that same price. If the leaseholders turn t down, it goes to the auction bidder.


To do everything properly, both parties need to serve notices, and stick to time scales etc. There's lots of info about it here: http://www.lease-advice.org/publications/documents/document.asp?item=16

eddddy

Also...

Deleted_User wrote: »

...
If it went to auction I believe I may get a substantial discount.
...

Assuming you (the leaseholders) are using your legal right of first refusal, that's probably a bad idea.

As I mention in the post above, you will be offered the freehold at whatever price the winning bid is.

If you start bidding against other potential buyers, you could be pushing the winning price up.

[Deleted User]

Cheers Edddy,

Got you now.

Unfortunately The freeholder is taking the 'michael' with service charges etc at the moment but I now understand thanks.

I wont pay £15250 with 4 flats and £200 ground rent as to get the investment back is pretty poor.If the leases were low then obviously this would be a good deal.

Thanks so far I shall be back.

[Deleted User]

eddddy wrote: »

Also...



Assuming you (the leaseholders) are using your legal right of first refusal, that's probably a bad idea.

As I mention in the post above, you will be offered the freehold at whatever price the winning bid is.

If you start bidding against other potential buyers, you could be pushing the winning price up.

Agreed and understand now.

Thanks everyone..

So hopefully it goes up for auction(my landlord is a get in and get out guy quickly) and he then has to offer this price to us first before sale to the winning bidder?

anselld

Deleted_User wrote: »

I wont pay £15250 with 4 flats and £200 ground rent as to get the investment back is pretty poor.If the leases were low then obviously this would be a good deal.

.

Freehold reversions are generally considered decent value at around 20x ground rent, so 20x 800 = £16,000. 15250 therefore seems a reasonable offer.

As ever with auctions it will depend who is there on the day so it might go lower, it might go higher.

[Deleted User]

OK thanks for the replys.

I have managed to get three of the four residents to agree to buy the freehold including myself.

I have a week left on the offer of consideration for the freehold.

We are looking to sort this out tomorrow.

If we put in an offer that is say slightly less could we lose the freehold if the landlord says no and takes us over the 2 months?

Also as there are three of us buying the freehold and it leaves 1 person that hasn't what is the situation with this?

Does the 4th person get away with just a peppercorn rent and maintenance etc as and when like us the freeholders or can we charge her more?

I'm not trying to rip the owner off but as we have stumped the cash up and she has not it seems a little unfair.Either way no big deal just wondered.

If she sells her flat and hasn't bought the freehold I presume we are the landlords and she has to sell hers leasehold?

Thanks