Just found out house is leasehold, not freehold.

kerri_gt

SouthLondonUser wrote: »

[*]be absolutely sure that you won't need the freeholder's permission (which typically requires a fee) for extensions, changes to the windows, etc. Have you ever heard of the Dulwich Estate in South London? Google it. If you buy a freehold house in that area, they can fine you if they don't like how you keep your garden, you must ask for their permission for any changes (double glazing is a big no-no), etc. Yes, even if you own the freehold - it's not a typo.
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That would form a restrictive covenant(s) - which aren't unusual in themselves. We own a freehold but have covenants attached such that windows need to be the same colour throughout the street, gardens need to be maintained, no external fixings (like aerials) on properties...oh and we're not allowed to keep livestock :rotfl: In practise many of these have zero effect on everyday life and have a positive contribution to the overall area.

smallbiznewbie

Freehold reversion = the leasehold house reverts back to the freeholder once the lease has expired

 

Freehold reversion companies  = companies that buy up large numbers of freehold reversions (usually without the leaseholders knowing anything about it) and then make money from exorbitant ‘admin fees’ when the householder wants to make improvements to the house (e.g. new windows), as well as other scams. Admin fees can theoretically be retroactive. Failure to pay can theoretically mean losing the house. Other ways they try to make money are charging fees when a leasehold house is sold, charging fees for enquiries about ground rent to potential buyers of the leasehold house when it next comes up for sale, charging exorbitant fees when the leaseholder wants to buy the freehold reversion, and even demanding that the householder uses their preferred buildings insurance (they get a cut. This one is almost certainly a scam). All these may or may not be legal demands – it depends on the covenants in the lease. Theoretically they may try to add new covenants if they sell you the lease. This too may or may not be legal. They will have a solicitor when they send you a threatening letter – you won’t have a solicitor when you receive it. Which means stress. If it’s worth their while collecting it the ground-rent may also provide them with steady income. It’s all a bit of a mine-field. Because of such companies and the growing awareness of leasehold scams with new-build houses (including ground rent scams) many members of the public won’t touch any leasehold properties with a barge pole.

 

Buying the freehold reversion = leaseholders legally have a right after two years to buy the freehold reversion, meaning that they then become the freehold owners. The fee is theoretically 20 – 30 times ground rent, but this can be increased by scam companies and lots of extra fees added e.g. a large number of so-called admin fees. Going to the Land Value Tribunal for what you hope is a fair valuation  can itself be very expensive and so leaseholders can be over a barrel - pay what the freehold reversioner demands, or you don't get the freehold. Ideally you will get the vendor to buy the freehold reversion before you buy the house - the vendor will have been there for two years and they can deal with the legal fees, long delays, legal hassle (and possible scams) before selling it to you.  I suspect that in the near future this might happen, but right now there are still enough buyers out there willing to buy leaseholds so the pressure is not yet on the vendors to sort all this stuff out before selling.  Quick note: a 999 year lease is NOT the same as a freehold for the reasons listed above, though some sellers will try to convince you that it is. I personally have walked away from such a situation before spending any money on solicitors. I don't like being suckered by a bait and switch.The land registry will tell you if it's freehold or leasehold - it costs £3 each time. It's now an integral part of my house-hunting. DO NOT believe the vendor when they tell you via the estate agent that their house is freehold. The link to the land registry is here:

https://eservices.landregistry.gov.uk/eservices/FindAProperty/view/QuickEnquiryInit.do?id=p_search_link

 

'Good leasehold' = leasehold where there’s no proof that the original landlord had the legal right to lease the property. As far as I can work out a ‘good leasehold’ cannot legally be upgraded to a freehold. This means that when selling it. it will have to be advertised as a leasehold, meaning lots of people won’t even look at it.

I learnt a lot of the above from the following link:

sheffieldforu (dot) co (dot) uk/topic/343796-coppen-estates-sheffield/

MovingForwards

Smallbiznewbie no need to bump a 2 year old thread.

smallbiznewbie

@MovingForwards

It was useful information that I haven't found anywhere else on this website. The thread itself came up in Google. Threads like this don't go out of date and are useful for others.

So sorry to have upset you.