Lease query

Crumble2018

Hello,



We are currently trying to buy a flat, and our solicitors have raised the following query with the sellers solicitior regarding the lease:
Clause 3 (16) (d) of the lease states there is a Landlord fee of at least 1% of the market value Plus VAT. Please confirm whether the fee of £2,712.00 is payable to the Landlord on completion. If so please provide further details as to who the monies should be made payable to.

Has anyone seen anything like this before? We are awaiting our solicitors reply, but my first thought when I saw it was !!!!!!?! I am a complete newbie to buying leasehold - is this normal and I've completely overlooked it?

need_an_answer

These types of clauses do exist although I would say they are not normal practice in the area of the country I live in.


I have several leasehold properties,none have a similar clause.


Is this fee in addition to charges for registration,changes of occupancy charges or any consents that you will also need as the new leaseholders in addition to regular service/maintaninance charges

Admittedly there are a lot more charges when buying leasehold compared to freehold you need to ensure that you are fully aware what charges are linked to the particular lease for the property you are buying.

davidmcn

What sort of property is it? These conditions are quite common for retirement flats.

Crumble2018

davidmcn wrote: »

What sort of property is it? These conditions are quite common for retirement flats.

Just average purpose built flats. Not retirement.

Crumble2018

need_an_answer wrote: »

These types of clauses do exist although I would say they are not normal practice in the area of the country I live in.


I have several leasehold properties,none have a similar clause.


Is this fee in addition to charges for registration,changes of occupancy charges or any consents that you will also need as the new leaseholders in addition to regular service/maintaninance charges

Admittedly there are a lot more charges when buying leasehold compared to freehold you need to ensure that you are fully aware what charges are linked to the particular lease for the property you are buying.

Yes - I knew there was more costs involved, but we hadn't budgeted for this! Trouble is we cannot afford to buy a house (live in the South East) so we either buy a flat or carry on renting.

need_an_answer

elsimsy wrote: »

Yes - I knew there was more costs involved, but we hadn't budgeted for this! Trouble is we cannot afford to buy a house (live in the South East) so we either buy a flat or carry on renting.

It is the sort of charge that unfortunately you don't find out about until you are midway down the buying process...

One thing that you might want to consider is how appealing the property will be to other purchasers when you come to sell it....it probably should be highlighted in the property particulars but its usually hidden away with the words "service and management charges apply"...or at best "low ground rent!"...the onus is on the purchaser to find out about all charges associated with the property before you put in an offer...which can be hard to do if the seller is at best vague and claims they don't know what their monthly outgoings are!


It might be worth finding out if other developments in your area all have a similar charge.If they do that means its more of a level playing field as opposed to when you coming to sell your purchaser having to make the decision over buying a leasehold without the levy or having to pay 1% of your asking price as sellers to the LL.


You need to be confident that the extra 1% isn't going to be a turn off for those who want to purchase this when you want to sell it

jee

If you are hesitating then so will others when you come to sell. What is the ground rent like?

cattie

I've owned 3 flats over the years & never come across any such condition in any of the leases.

I'd say look elsewhere as it might not be an attractive proposition should you want to sell in the future.

Crumble2018

jee wrote: »

If you are hesitating then so will others when you come to sell. What is the ground rent like?

We are waiting for this to be clarified (yeah I know - Rookie error!)


Thing is, there are 2 other flats in the block currently sold STC which would be further down the line than ours, and another that completed last year - so they are obviously selling despite this clause :undecided

SallyDucati

When I sold my flat last year I had to pay a fee to the landlord as the seller - not the buyer. I think you also need to get the solicitor to confirm who is liable. If it is the seller you will have to pay if/when you sell.

Crumble2018

SallyDucati wrote: »

When I sold my flat last year I had to pay a fee to the landlord as the seller - not the buyer. I think you also need to get the solicitor to confirm who is liable. If it is the seller you will have to pay if/when you sell.

Yes - I've since read this elsewhere. Still waiting for the solicitors to clarify - they seem to be moving quickly, but are not so quick in answering queries (although I admit that patience is not a virtue of mine!!)