Advertised as Freehold, turns out to be Leasehold - any similar experiences?

LJS2014

Hello All,

Quick question for you helpful lot please

A friend of mine made an offer on a house which was accepted. The property was advertised as Freehold. Now, after having the survey done, he has been advised the property is actually Leasehold. Has anybody else been in this situation and how did it affect how you felt about proceeding with the purchase? My friend is not keen on buying a Leasehold property and will probably pull out of the purchase but having already spent money and based his mortgage application on it being a Freehold property is there any comeback on the agents for advertising (and confirming to him in writing) that the property was Freehold?

Thanks in advance for any experiences you may be able to share on this.

:beer:

Davesnave

LJS2014 wrote: »

My friend is not keen on buying a Leasehold property and will probably pull out of the purchase but having already spent money and based his mortgage application on it being a Freehold property is there any comeback on the agents for advertising (and confirming to him in writing) that the property was Freehold?

No comeback. Your friend is in the same position as he was before. He can still buy the house or he can choose to walk away and suffer a 'loss,' but that will be his choice.

It's no different than the situation when other things are revealed about houses, like when a survey shows the agent's 'wonderful example of Arts & Crafts architecture' to be a dry rot-infested liability.

The agent will only be parroting what they've been told, as it's not usual for agents to look at legal paperwork, which is the job of solicitors.

Also, somewhere in the info the agent has sent there's likely to be a disclaimer, advising that nothing they write may be relied upon. That's pretty standard.

Incidentally, I thought my first house was freehold, but found out it was leasehold during the buying process. My vendor was dead, her successor was doolally and the executor of the estate was 82, so I didn't blame anyone. No one ever collected ground rent and it increased in value by x6 in ten years.

LJS2014

Thank you for the reply Davesnave that's really helpful - wondered if that might be the case but always great to get info from those who have been in the same situation.

:beer:

moneyistooshorttomention

I'm wondering if this is a one-off type house (eg as DavesNave one was by the sound of it) on the one hand or a new-build one in an estate of new-build houses (that have all been put on a leasehold basis - rather than the standard freehold basis houses are usually on)??

Must admit that - in your friends' position - there would be a very firmly worded letter to whoever was in overall charge of that EA saying words to effect of "As houses are, as standard, freehold and EA has told me in writing that this one is freehold - what can you offer me to lessen my losses for having to reject the house after all (because of the EA's mistake about an obvious factual matter)". As stated though - there is no legal right to compensation for this - but I would take the view I might as well at least try for some sort of recompense for having been misled about such a clear factual error.

But - the basic gist would be that I would reject the house for being leasehold (even if I hadn't been told it was freehold in the first place). Davesnave obviously got lucky with his previous purchase - but I don't think I'd care to bargain on it as the norm.

bouicca21

The essential question is: how long is the lease?

chris_m

bouicca21 wrote: »

The essential question is: how long is the lease?

Closely followed by "How much is the Ground Rent and what arrangements are there for it to be increased?" and "Are there any Service Charges, if so for what and how much are those?"

Davesnave

bouicca21 wrote: »

The essential question is: how long is the lease?

chris_m wrote: »

Closely followed by "How much is the Ground Rent and what arrangements are there for it to be increased?" and "Are there any Service Charges, if so for what and how much are those?"

Yes, these go a bit beyond the original question and into the realms of 'Why reject it?' They are worth asking, though.

I didn't think being leasehold was terribly bad in the case of my first house. If I recall correctly, the ground rent was a peppercorn sum set in 1898 and the lease ran either 900 or 999 years from then....a long time anyway!

By the way, I made a erroneous statement earlier when I claimed to have bought from a deceased vendor. That is, of course, impossible.

LJS2014

The questions regarding the lease are really valid points if you were open to considering purchasing a Leasehold property but my friend only ever intended to purchase Freehold. Was really just trying to find out if it's common to learn the tenure of the property is different to that advertised by the EA after survey's etc have been paid out for and if there was any comeback. I think it's just another of many unfortunate pitfalls most of us might come across when buying/selling property and it's down to personal choice what is/isn't a deal breaker. Thanks for the replies everyone, much appreciated! :beer:

bouicca21

My point would be that a 900 odd year lease would be a virtual freehold and a very different animal to a a modern shorter lease.

densol_2

I wouldn't buy a leasehold house ! There are lots of threads about private companies buying the freehold, then making owners buy their insurance with their " required " insurance company at a significant premium

OP - I would make a formal complaint to the Estate agent - especially after you confirmed and got it in writing that it was freehold. Surely the agent should have confirmed his information instead of misrepresenting the property in that way.

ANGLICANPAT

You have to wonder why its not a case of the vendor being accused of fraud, as obviously a FH property is a much more attractive proposition for the price offered so will attract more attention . Its deliberate deceit . I dont believe you can own a leasehold property and fail to notice that you're paying ground rent and service charges and if you do know, I dont believe when you engage an EA and he writes up the advertsing blurb, that you can say you didnt notice he'd put 'FH' either.