Freehold....BBC this morning

Shakin_Steve

Old news to the knowledgeable folk on here, I know. But may be of interest to some:

http://www.bbc.co.uk/news/business-38827661

sparky130a

And that, in a nutshell is why you get decent legal advice when purchasing a property.

There is no "trap". Just people trying to do things on the cheap. And lo and behold iv'e just read the "article" more thoroughly and guess what...

She used the developers palm stained solicitor monkey friend....

csgohan4

people want to blame others rather than themselves, no sympathy tbh, just like the interest only mortgages 'scandal'

nicmyles

Developers making new build houses leasehold is a terrible practice, though. No reason for it other than to get another bite at some cash once they've sold the property. It probably should be outlawed, but completely agree there's no way you can buy one without knowing what it means, unless you don't read things properly or your solicitor is awful.

bobobski

The reference to "British law" is interesting...

moneyistooshorttomention

Well the more people that kick up about this racket = the sooner it will be outlawed.

Keep screaming about it if you're affected imo.

The more it's publicised - then the more likely that potential buyers will realise and "vote with feet" and that lark may die a death anyway (ie because of developers not being able to sell their houses).

People will boycott houses with "issues" - even if they're brand new or well-refurbished and the house itself is fine. I'm watching a boycott of 3 houses near me going on right now (all for the same reason and to do with the 2 plots they're on in this case).

daveyjp

Nothing new. My parents first house built decades ago was a leasehold, as were all of the houses on the estate.

Over time they saved and bought the freehold.

Shakin_Steve

A couple of things:

1) Estate agents should be required to place the fact that it's leasehold on their ads. I looked at a property last year and it was only when I rang and specifically asked the question that they told me. When I asked why it wasn't in the ad I was told "Well...it's only £50 a year". Yeah.....for now.

2) Houses which are sold in the same street/estate should be priced accordingly depending on whether they are freehold or leasehold. I notice when searching last year this was not the case.

steampowered

csgohan4 wrote: »

people want to blame others rather than themselves, no sympathy tbh, just like the interest only mortgages 'scandal'

nicmyles wrote: »

but completely agree there's no way you can buy one without knowing what it means, unless you don't read things properly or your solicitor is awful.

I think these comments are unfair and that it is actually a very easy trap to fall into. Even if you are a careful person who reads all the documents and use a solicitor.

Here is a typical ground rent clause for a 99-year lease:

"To pay to the Lessor without any deduction in addition to the said rent a proportionate part of the expenses and outgoings incurred by the Lessor in the repair maintenance renewal and the provision of services hereinafter set out the yearly sum of Ninety Pounds and value added tax (if any) for the first three years of the term hereby granted increasing thereafter by Ten Pounds per Hundred for every subsequent three year period or part thereof."

Do you understand what it means?

If you were the buyer of that leasehold property, would it have been be obvious to you that this clause would
result in ground rent payments of £3,366 per year by 2012 and over £1 million per year by 2072?

That clause would have been buried in a lease running to perhaps 30 pages.

I've taken the clause from a recent Supreme Court decision available here, which concerned a 99-year lease of property in a caravan park in Wales.

Shakin_Steve

steampowered wrote: »

I think these comments are unfair and that it is actually a very easy trap to fall into. Even if you are a careful person who reads all the documents and use a solicitor.

Here is a typical ground rent clause for a 99-year lease:

"To pay to the Lessor without any deduction in addition to the said rent a proportionate part of the expenses and outgoings incurred by the Lessor in the repair maintenance renewal and the provision of services hereinafter set out the yearly sum of Ninety Pounds and value added tax (if any) for the first three years of the term hereby granted increasing thereafter by Ten Pounds per Hundred for every subsequent three year period or part thereof."

Do you understand what it means?

If you were the buyer of that leasehold property, would it have been be obvious to you that this clause would
result in ground rent payments of £3,366 per year by 2012 and over £1 million per year by 2072?

That clause would have been buried in a lease running to perhaps 30 pages.

I've taken the clause from a recent Supreme Court decision available here, which concerned a 99-year lease of property in a caravan park in Wales.

I agree that the clause would be gobbledygook to most people, but I'd be really peed off if my solicitor didn't explain it fully.

Niv

steampowered wrote: »

I think these comments are unfair and that it is actually a very easy trap to fall into. Even if you are a careful person who reads all the documents and use a solicitor.

Here is a typical ground rent clause for a 99-year lease:

"To pay to the Lessor without any deduction in addition to the said rent a proportionate part of the expenses and outgoings incurred by the Lessor in the repair maintenance renewal and the provision of services hereinafter set out the yearly sum of Ninety Pounds and value added tax (if any) for the first three years of the term hereby granted increasing thereafter by Ten Pounds per Hundred for every subsequent three year period or part thereof."

Do you understand what it means?

If you were the buyer of that leasehold property, would it have been be obvious to you that this clause would
result in ground rent payments of £3,366 per year by 2012 and over £1 million per year by 2072?

That clause would have been buried in a lease running to perhaps 30 pages.

I've taken the clause from a recent Supreme Court decision available here, which concerned a 99-year lease of property in a caravan park in Wales.

I know exactly what it means to me. I read the first 5 words - oh right leasehold - don't offer