Legal Advice

PaulC5

Probably a stupid question but where do you get legal advice on a contract to purchase a house?

There are a couple of things I'm not entirely happy with/understand and wondering if they are negotiable or is it a case of take it or leave it?

When_the_going_gets_tough

You need your own solicitor - I think using the estate agents/builders solicitor is always a bad idea as you cannot guarantee impartial advice.

PaulC5

Having read the paperwork I have received and thought about it over the weekend.

My main issue is the Leasehold agreement. It amazes me that they are allowed to own the land and charge you each year for the privilege even though you bought the house off them in the first place, at a massive profit to the builder and then every 10 years they are allowed to review that agreed leasehold amount and increase it.

I guess this is non negotiable and is a case of either you want that house on there terms or not?

Pixie5740

If it's a leasehold property that you are buying then I doubt it's negotiable. Your solicitor will be able to advise.

jbainbridge

Indeed. You don't have to buy it!

jjlandlord

PaulC5 wrote: »

My main issue is the Leasehold agreement. It amazes me that they are allowed to own the land and charge you each year for the privilege even though you bought the house off them in the first place, at a massive profit to the builder and then every 10 years they are allowed to review that agreed leasehold amount and increase it.

It's a leasehold.
You do not 'buy' the house, you rent it.

This is the way all leaseholds work, so if that's unacceptable you should walk away and focus on freehold property.

PaulC5

jjlandlord wrote: »

It's a leasehold.
You do not 'buy' the house, you rent it.

This is the way all leaseholds work, so if that's unacceptable you should walk away and focus on freehold property.

So what is the money you put on the mortgage to pay for the house then?

Your only renting the land it is built on, right?

jjlandlord

PaulC5 wrote: »

So what is the money you put on the mortgage to pay for the house then?

Your only renting the land it is built on, right?

No, you rent the property.

What you buy is the lease: The current owner/tenant owns it and agrees to assign it to you.
Then, as you have become the owner of the lease, i.e. the tenant, you must pay rent to your landlord, the person who owns the freehold.

AdrianC

PaulC5 wrote: »

So what is the money you put on the mortgage to pay for the house then?

Your only renting the land it is built on, right?

If that logic worked, then explain how the buildings maintenance - especially common areas - on blocks of flats work...?

You are buying use of a section of the building for a period of time. You do not own the fabric of the building. You do not own the right to use any of the building forever, although a 999 year lease is pretty damn close for all realistic purposes.

PaulC5

Am I missing something?

I am buying a New house off Redrow. I will be paying Redrow the house price agreed by means of 5% deposit and the rest on a mortgage.

I then have to pay a leasehold on the ground rent, this is the thing I am talking about.

benjus

PaulC5 wrote: »

Am I missing something?

I am buying a New house off Redrow. I will be paying Redrow the house price agreed by means of 5% deposit and the rest on a mortgage.

I then have to pay a leasehold on the ground rent, this is the thing I am talking about.

Sounds like you are buying a leasehold house. As other posters has pointed out, you are not buying the house, you are buying a lease on the house. While this is legally renting, it is not like a shorthold tenancy - the lease itself has a value and can be bought and sold, and it can be extended indefinitely.

This is different to freehold where you buy the land and the property on it.

Unless the house itself is freehold and the lease is for something else (e.g. a garage in a shared block).

Sounds like you need to do some research and talk to your solicitor.