What are my rights? Please help. We shouldn't get a mortgage in a first place?

Janzzz

eddddy wrote: »

...Suggest to your freeholder that you plan to do a statutory lease extension, unless you can agree a reasonable price with them.

Thank you so much @edddy
You are right, someone also recommended this, so we asked them for the statutory extension, however, they kind of ignored it and replied they would be happy with lease extension which would include an accompanying share of the freehold company and recommended using their favourite surveyor.

So, I'm a bit confused if I should ask for the surveyor to give us valuation for statutory only or 999/share of freehold?

Please, what would you recommend?
Thank you

eddddy

Janzzz wrote: »

So, I'm a bit confused if I should ask for the surveyor to give us valuation for statutory only or 999/share of freehold?

That's a complicated question...

I guess ideally ask for both valuations then decide (unless the valuer charges a lot extra for 2 valuations).

If there are lots of flats in the block with short leases, a share of freehold might be very expensive - because you would become entitled to a share of all the future lease extension payments.

Janzzz wrote: »

...and recommended using their favourite surveyor.

Normally, you wouldn't use the same surveyor as the freeholder, because there would be a conflict of interest. And therefore, most surveyors won't work for both a freeholder and a leaseholder.

To explain why, I'll use a typical example of a lease extension negotiation, with made up numbers... assuming 90 years added to lease and peppercorn ground rent:

You (the leaseholder) instruct a surveyor who reports back to you:

"If you follow the statutory process, I estimate that a tribunal would decide that the lease extension cost would be between £25k and £30k.

Therefore, I advise you to offer £20k to start with, and negotiate from there."

And the freeholder's surveyor might report back to the freeholder:

"If the leaseholder follows the statutory process, I estimate that a tribunal would decide that the lease extension cost would be between £28k and £32k.

Therefore, I advise you to ask for £36k to start with, and negotiate from there."

Maybe the best starting point is to find a lease extension valuer, and start discussing different ways of approaching this...

Janzzz

eddddy wrote: »

That's a complicated question...

Thank you very much @edddy
Well, we know that everyone who used their own surveyors was ignored and forced to pay for their favourite surveyor anyway. ...so, someone told us go for their and see what they come up with.
I didn't know current freeholders would all share what I'll pay... I thought the money would stay in the fond for repair cost etc.
We are very probably facing a big number - there are 85 flats here and only about 8 of us are still leasholders.

KiKi

I would be gobsmacked if your seafront flat isn't worth a significant amount more than what you paid nine years ago. I've had three places in Brighton; the first made £50k in five years, the second made £70k in seven years, and the current one around £100k in three years. And mine haven't been on the seafront! It doesn't take away the issue of paying for a lease extension (or finding a buyer who's not bothered by it), but I can't imagine that you'd make a loss, not for one second, which is a relief at least.

With regards to the legalities, the solicitors should have advised you of the lease length: if you still have the correspondence then check, but I'd be surprised if they hadn't raised it.

KiKi

eddddy

Janzzz wrote: »

Well, we know that everyone who used their own surveyors was ignored and forced to pay for their favourite surveyor anyway. ...so, someone told us go for their and see what they come up with.

The other flats/owners that you mention - are any/all of their flats the same size as yours with the same lease length as yours? Were their valuations recent?

If so, just suggest to the freeholder that you pay the same amount that they paid.

Janzzz

eddddy wrote: »

The other flats/owners....

Thank you. Great idea. only about 10 flats are same size and layout and one extended their lease back in 2012. I'll try to find out how much they paid... and possibly try to offer the same money + the % of the current market increase since 2012. Or something like that.

[Deleted User]

Check your contract.
According to Halifax's own website "We'll only lend on leasehold properties with at least 70 years left on the lease when you apply. Before you buy, your conveyancer will check the lease terms to make sure they are acceptable."

https://www.halifax.co.uk/mortgages/mortgage-information/property-types/


Therefore - either they have changed the lease length in the last ten years (check your contract) or the solicitors didn't notify them and they have screwed up.

Kynthia

So we're Halifax the seller and mortgage lender, as that would seem to be a possible conflict of interest there? Did they also recommend the solicitor? If they then lent against their own policy for lease length that would concern me.

davidmcn

newbieboy wrote: »

Check your contract.
According to Halifax's own website "We'll only lend on leasehold properties with at least 70 years left on the lease when you apply. Before you buy, your conveyancer will check the lease terms to make sure they are acceptable."

https://www.halifax.co.uk/mortgages/mortgage-information/property-types/

Therefore - either they have changed the lease length in the last ten years (check your contract) or the solicitors didn't notify them and they have screwed up.

It's possible the Halifax have changed their criteria since 2000. Even if the solicitors did screw up by failing to comply with the Halifax's criteria, it's only the Halifax who would have a claim (if they repossessed and suffered a shortfall), not the OP. Though the OP may also have a claim if the solicitors failed to notify them of the lease term.

Kynthia wrote: »

So were Halifax the seller and mortgage lender, as that would seem to be a possible conflict of interest there?

No rules against that, as far as I'm aware. Bear in mind they're only the "seller" insofar as they're permitted as the lender in possession i.e. they can only apply the sale proceeds against the mortgage balance and their own legitimate costs - any surplus would have gone to the borrower.

Janzzz

newbieboy wrote: »

Check your contract.
According to Halifax's own website "We'll only lend on leasehold properties with at least 70 years left on the lease when you apply. Before you buy, your conveyancer will check the lease terms to make sure they are acceptable....

Kynthia wrote: »

So we're Halifax the seller and mortgage lender, as that would seem to be a possible conflict of interest there? Did they also recommend the solicitor? If they then lent against their own policy for lease length that would concern me.

Thank you very much newbieboy and Kynthia
They did recommended their surveyor and when we have bought there was only 64years left.