Estate agent lied to me about length of lease - advice?

olly300

7sefton wrote: »

Thanks for all the helpful comments guys.

For those who are saying I've made a mistake / not done due diligence, maybe you've got a point. But I'm a first time buyer, in London, with a very tight budget, so perhaps I was a bit naive. However, when the EA explicitly told me to my face 'I need to confirm with the vendor, but there's definitely 90 years left' I consider this a lie.

It's the vendor who misinformed you not the EA and it's the vendor who has been unhelpful.

The EA can only say what the vendor tells them. If they don't know they will say "I don't know" as they don't want any legal comeback.

In my own case my vendor gave me a photocopy of the lease but because there was a mistake in the number of years - in the original lease someone had manually added 5 years - everyone involved including the mortgage company and solicitors until they saw the original lease told me I had 5 years less. In my case as there was over 90 years left it made no difference to the price.

eddddy

A good strategy might be to tell the vendor (perhaps via the EA) that you want a lease extension before completion - and see what response you get.

A well organised joint freehold company might have a well defined process in place for doing this (as every leaseholder will want to do this as they come to sell).

But if the response suggests that there is no process in place, there is disagreement about how it should be done, and generally indicates that the company isn't well run - you might have to resign yourself to going down the statutory route.

AdrianC

7sefton wrote: »

However, when the EA explicitly told me to my face 'I need to confirm with the vendor, but there's definitely 90 years left' I consider this a lie.

That's not what you originally said...

She said she was still waiting for the exact length from the vendor but advised me it would be at least 90 years.

OK, so there's 82 years instead of 90. You say your offer was made, explicitly dependent on there being 90yrs left? So ask for an extension... Or ask for a reduction equivalent to the cost of extension in two years time, and extend it yourself.

If they say no... oh, well. You wouldn't have bought that flat if you'd known anyway, right?

macman

If the EA 'needed to confirm with the vendor' then they were not in a position to guarantee a minimum 90 years, and you should have challenged that statement, or made your own enquiries.
The EA works for the vendor, not for you, and they will naturally always attempt to put a positive spin on such things. 'Lies' involve telling a deliberate untruth, and they were not in a position to do that, because the didn't know the truth themselves.
As stated above, you can continue, withdraw, or negotiate a reduction based on the falling value, and these options remain open until the day of exchange.

7sefton

Hi everyone

Resurrecting this thread because now an additional 'misunderstanding' with the EA has been unearthed by my solicitor. It's made me even more angry.

The flat was clearly sold to me as 'share of freehold': I have this in writing from the EA and it appears on the property listing (which is still on the EA's website).

However my solicitor says the flat is actually just a leasehold, but all leaseholders own a share in the 'management company'. Apparently this has some benefits (e.g. tenants have control over repair contractors etc.) it is NOT as advantageous as share of freehold, and makes the extension of the lease more costly than previously thought. My solicitor thinks the vendor himself may be confused, and thinks he has a share of freehold when in actual fact it's just a share in the management company.

As you might imagine, I'm in a bit of a spin about what this means and how I should react. I know that I definitely want to negotiate a lower price, because the property was valued as being a share of freehold and it looks like the lease will cost around £10k to renew. I'd be very grateful for any advice anyone has on my situation, especially:

- Is it common for owners to have share of the management company but not share of freehold?
- What other benefits are there to owning a share of the management company?
- How could I word my negotiation to the EA?

Thanks so much.

Thrugelmir

Why the fixation with the EA?

Your communication needs to be directed at the vendor.

7sefton

Thrugelmir wrote: »

Why the fixation with the EA?

Your communication needs to be directed at the vendor.

My solicitor says all negotiations go through the EA - I don't even have contact details for the vendor.

marksoton

7sefton wrote: »

Hi everyone

Resurrecting this thread because now an additional 'misunderstanding' with the EA has been unearthed by my solicitor. It's made me even more angry.

The flat was clearly sold to me as 'share of freehold': I have this in writing from the EA and it appears on the property listing (which is still on the EA's website).

However my solicitor says the flat is actually just a leasehold, but all leaseholders own a share in the 'management company'. Apparently this has some benefits (e.g. tenants have control over repair contractors etc.) it is NOT as advantageous as share of freehold, and makes the extension of the lease more costly than previously thought. My solicitor thinks the vendor himself may be confused, and thinks he has a share of freehold when in actual fact it's just a share in the management company.

As you might imagine, I'm in a bit of a spin about what this means and how I should react. I know that I definitely want to negotiate a lower price, because the property was valued as being a share of freehold and it looks like the lease will cost around £10k to renew. I'd be very grateful for any advice anyone has on my situation, especially:

- Is it common for owners to have share of the management company but not share of freehold?
- What other benefits are there to owning a share of the management company?
- How could I word my negotiation to the EA?

Thanks so much.

It's been as near as damn it 2 weeks now. Just walk away and look elsewhere...

Irratus_Rusticus

Re post #28. Hence term buyer beware. Trust nobody. Otherwise the lessee freehold company could have granted 999 year leases and avoided extensions per individual flat. Not sure you would find a freehold share flats with a short lease otherwise?

'Share of the management company' presumably means a Right To Manage company and that is not a 'share' company but a right to join under guarantor membership company. No control over clauses in lease and must go to freeholder as before for variations and extensions. Can manage the services and give preliminary consents but needs the freeholder not to object for these. And RTMCos can be hot beds of self-interest among the flats in them. Little in leasehold is automatically sweetness and light, sorry.

Soundgirlrocks

7sefton wrote: »

From what I can see from the other legal documents, the flats have various lengths of leases on them (about a third are the same as mine, others have obviously been renewed more recently because they run for over 200 years).

What does this all mean for me, if I want to renew? I.e. it doesn't seem like every share of freeholder needs to agree and renew the lease at the same time, otherwise there wouldn't be differing lengths of lease in the block, would there?

This is key, find out what the others that have extended paid for their lease extension. Leaseholders have to be treated fairly ( the free holding company can't do the leases for free and then charge you) so if they got theirs for free then a precedent has been set. However beware it might be that those that extended paid market rate and the money is then put into the pot for repairs. This is what we have been advised to do in our block as a way to build a sink fund.