Urgent leasehold advice

Minkston1978

Hi all,

I hope this is the correct section to post this - apologies if not.

My wife owns a small 2 bedroom flat she rents out with her two sisters (she inherited it from her late parents). Anyway, it's part of a block and we own an 87 year leasehold on the property.

Shortly after we inherited the property we were approached by a gentleman who owned the 9 other flats there, the shop below and the freehold. He offered them a derisary sum for it (approx 2/3rds of the value) which we declined. Instead we spent some money renonvating it and rented it out to a nice lady and her daughter.

About a year ago the same gentleman told us he had applied for planning permission to demolish the entire block (our property included) to build a modern block in it's place. He said he would offer us one of the new properties in exchange which sounded great but we told him we'd need to involve solictors etc. as there would need to be a number of caveats (i.e. what happens if he runs out of money or takes 10 years to get it finished). At this point he ceased contact and we haven't heard from him since.

Today we got a phone call from our tennat in tears saying everyone in the block has been given 1 months notice (except her) and they are planning on demolishing it immediatley afterwards. The letting agent who represents the gentleman told her that the he can do whatever he likes as he owns the freehold.

We are naturally pannicking as we do not know what rights we have and we're concerned what he might/can legally do.

I'd appreciate any advice anyone can offer. We are going to get a solictor asap.

Thanks

Paul

Sianybaby82

Sorry I don't have any advise but if you have a look on the leasehold advisory service website this may have some info. Also you can contact them for support.

Wishing you all the best.

economic

i seriiously doubt the freeholder can just do that. you own a lease for 87 years which means he has no right to take that away from you (unless you dont pay ground rent but even then its a court process to try get you evicted and lease handed over to FH). i would take legal action right now and get your legal fees paid by FH if you win. i would also post this question on landlordzone.co.uk as its more specialist then this forum.

Lioness_Twinkletoes

The freeholder cannot just meander in and demolish the block. Nor can he force you to sell - not without a Compulsory Purchase Order - and they can take years to get. The Freeholder can empty his own properties in readiness for redevelopment but there is nothing he can do about your property, other than make it lonely for your tenant. He still needs to maintain the block etc.

He'll need to buy your flat back off you - and CPO guidelines state that he must offer an independent valuation, offer market value plus 7.5% basic loss payment plus your reasonable disbursements (onward SDLT, solicitors fees etc).

if he is serious about redeveloping (has there been a planning application submitted?) then you're in a very strong position.

Personally, I'd sit tight at this point and wait for his contact.

G_M

The above is sound advice, but I suggest you also get some legal advice - perhaps try http://lease-advice.org/

If you have a legal helpline, or better still legal cover extension, with your insurance, get in touch with them too.

If he tries riding roughshod over the law you need to know, fast, what action you can take.

I imagine (not an area I'm familiar with) that you could rapidly apply for a court order instructing him to stop work. But you need to get to know the procedure so that if the worst happens you are prepared.

You also need to learn how to enforce maintenance work and repairs. It seems likely he is going to let the property degenerate and you have rights about maintenance.

To be honest, I'd be planning to sell as this is going to be a long term problem. Unfortunately no one else will buy, as once a buyer starts investigating they'll soon be put off, so the best outcome is to sell, at the right price, to him.

That's not much help for your tenants though.....

eddddy

Lioness_Twinkletoes wrote: »

The freeholder cannot just meander in and demolish the block. Nor can he force you to sell - not without a Compulsory Purchase Order - and they can take years to get. The Freeholder can empty his own properties in readiness for redevelopment but there is nothing he can do about your property, other than make it lonely for your tenant. He still needs to maintain the block etc.

He'll need to buy your flat back off you - and CPO guidelines state that he must offer an independent valuation, offer market value plus 7.5% basic loss payment plus your reasonable disbursements (onward SDLT, solicitors fees etc).

if he is serious about redeveloping (has there been a planning application submitted?) then you're in a very strong position.

Personally, I'd sit tight at this point and wait for his contact.

No individual (or company) can issue a compulsory purchase order - only a very limited number of public bodies can do that.

If the freeholder wants to "buy out" the lease, he just has to offer more and more money until Minkston1978 accepts.


@Minkston1978 - consider talking to a surveyor/land agent who can look at the freeholder's plans and work out what profit the freeholder might make, and therefore how much money your sister could get for the flat.

e.g. If it's a big development and the freeholder stands to make £2 million in profit, your sister could try asking for £1 million.

You could even ask the surveyor/land agent to negotiate on your behalf.

TBH, the freeholder has been silly to let your sister get into a position of such strength. He should have got an agreement with her much earlier on.

Mokka

Even Donald Trump couldn't get the Scottish Government to issue CPOs for properties around his golf-course. Apparently he couldn't get his head round the fact that even governments have to follow the law:rotfl:

The freeholder can make your life difficult, but the law is fully on your side. Think about how much would you be prepared to sell for. Or get ready for a fight. Is there something similar in the neighbourhood which could provide similar income? I would be wary of waiting for the new property. God knows what terms the new lease would be under- they might be very unfavourable (such as high and escalating ground rent).