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Selling Leasehold Property
ekumi00
Posts: 24 Forumite
Good Evening All...
I am in the process of selling my leasehold flat which is based in South East London. The lease length is fine (98 years) and the ground rent is £150 per year. The ground rent does double in 2040 to £300 and double again in 2070 to £600. My buyers solicitor is saying they would like the lease varied to remove the doubling clause but I know this is not a requirements for the mortgage lender. Varying the lease which my freeholder is happy to do will cost me an additional £900 in legal fees plus an additional £4,000 premium to the freeholder. I would understand if the ground rent doubled every 10 or 15 years but every 30?
Am I being unreasonable to think this is an over the top requirement for a property with a small ground rent that will not increase for another 20 years and even when it does, is still relatively small in comparison to many other leasehold properties in London?
Do you think offering the buyer a small reduction in the price to proceed with the sale is worth it? or I should go back on the market and wait for another buyer?
Would appreciate the thoughts and advice of this great community!
I am in the process of selling my leasehold flat which is based in South East London. The lease length is fine (98 years) and the ground rent is £150 per year. The ground rent does double in 2040 to £300 and double again in 2070 to £600. My buyers solicitor is saying they would like the lease varied to remove the doubling clause but I know this is not a requirements for the mortgage lender. Varying the lease which my freeholder is happy to do will cost me an additional £900 in legal fees plus an additional £4,000 premium to the freeholder. I would understand if the ground rent doubled every 10 or 15 years but every 30?
Am I being unreasonable to think this is an over the top requirement for a property with a small ground rent that will not increase for another 20 years and even when it does, is still relatively small in comparison to many other leasehold properties in London?
Do you think offering the buyer a small reduction in the price to proceed with the sale is worth it? or I should go back on the market and wait for another buyer?
Would appreciate the thoughts and advice of this great community!
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Comments
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Tell them that's fine but the price will be going up £5k to cover your costs.1
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How long were you on the market?How many views?Any other offers?I'd decline the suggestion and see what happens.1
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We were on the market for 10 days, 8 viewings and just the 1 offer from our buyer. Agreed price £4k under asking so I was very pleased with that. Time to ponder this weekend. Thanks for replies.0
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10 days is not long. Clearly there's interest. Re-market if they make problems.1
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Just tell the buyers' solicitor that you do not propose to do anything along the lines they have suggested. I think they are bluffing. But if they are not I would let them go, and move on to a new buyer. Having lived in SE3 in Blackheath some years ago, I have come across this doubling of ground rent before and it is not something that a buyer's solicitor should even be raising with you.
Good luck.
PS----I really like Slithery's posting : that's the way to deal with snotty solicitors who think they can strong-arm buyers who they view as beneath them. Blimey, I hate solicitors-----I mean I would hate solicitors if I were not a thoroughly nice person
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Haha thank you for the replies. I think I know what I will be doing on Monday morning.
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If a lot of the flats locally have the doubling ground rent, then you can argue that it’s reflected in local prices.
Incidentally, it’s interesting that there’s been a lot of interest in your flat. Does it have access to outdoors space? That seems to be an important factor these days.No reliance should be placed on the above! Absolutely none, do you hear?0 -
ekumi00 said:Haha thank you for the replies. I think I know what I will be doing on Monday morning.
FWIW, I'm not sure that confrontation and aggression works so well as negotiation technique - especially with a solicitor.
People tend to see that as a challenge, so will come back even harder with more even more demands, and more determination to "win" the negotiation.
I would tend to contact the EA, with a copy of the freeholder's offer, and explain that your solicitor doesn't see a problem, and ask the EA to ask the buyer which they want to do:- Proceed with the purchase with the current lease terms - and they can take up the freeholder's offer later if they wish
- Arrange a lease variation on completion, which would require a payment of £4k plus fees to the freeholder
- .... and having decided, they should inform their solicitor, and you should inform your solicitor
Assuming the EA is paid on completion, it's part of their job to negotiate and navigate through these kinds of challenges. (Whereas it is not part of the solicitor's job to negotiate.)1 -
If they change from 30yr-doubling to anything inflationary, especially if it brings in annual increases, they'll find themselves paying a LOT more.0
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30 year doubling is equivalent to 2.3%pa increases. Who knows what the inflation rate will be over that period?AdrianC said:If they change from 30yr-doubling to anything inflationary, especially if it brings in annual increases, they'll find themselves paying a LOT more.No reliance should be placed on the above! Absolutely none, do you hear?0
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