Substation lease up

Funkysgirl

We bought our house six years ago and the solicitor told us we owned the land next to our house where a substation is. The lease was a 60 year one and the solicitor told us the power company would have to approach us to renew within 8 years.
We have just received as letter from Power grid with a view to leasing the land again or buying it freehold. Anyone have any experience of this? Our guess would-be if we sold the land it would affect the value of our house. If we lease what's the going rate? And can you get 60 years rent up front? At our age we won't be here in 60 years! Guy from Powergrid arrived to discuss in two days so any information would be appreciated.

Samsung_Note2

Funkysgirl wrote: »

We bought our house six years ago and the solicitor told us we owned the land next to our house where a substation is. The lease was a 60 year one and the solicitor told us the power company would have to approach us to renew within 8 years.
We have just received as letter from Power grid with a view to leasing the land again or buying it freehold. Anyone have any experience of this? Our guess would-be if we sold the land it would affect the value of our house. If we lease what's the going rate? And can you get 60 years rent up front? At our age we won't be here in 60 years! Guy from Powergrid arrived to discuss in two days so any information would be appreciated.

Is that not coverd in the contract when your bought your place..im sure there would have been a guide as what is expected and reasonable.

Lets face it you could demand £1 a year for 60 yrs or £20,000,0000 a year for 60 years..doesnt mean they will agree to it.

Id imagine it would be renewed at something like a leasehold on a flat where limits would come into play.

Id look into selling personally if you dont intend to move in the next few years...could be a nice lump of cash in your pocket.

da_rule

You’d need to speak to your mortgage company if you want to sell the land (you may still need to speak to them with regards to a new lease).

The rent will depend on the size of the substation. They may agree to pay it all as a lump sum but you need to consider the following:
1) If the lease ends early will you/whoever owns the house at the time have to repay them? This will potentially have an effect on the value of the property.
2) The amount you receive will probably be reduced by reference to a yielding calculation so probably won’t be 60 x the rent.
3) Getting the amount as a lump sum may have tax implications for you.
4) Having a lease that generates no income for the next 59+ years might impact on the value of your property.

Leases in relation to the provision of utility equipment by statutory undertakers is a somewhat specialist area of law. You may also want to throw in that you want them to cover your legal costs, as if you get this wrong it could cause you problems for a good few years to come.