Buying the leasehold on a house - what happens to other fees?

withaspritz

Hi,

Looking at a house purchase, and a few new-ish nice looking leasehold houses are on offer for well below budget.  If we budgeted to purchase the freehold, what happens to the other fees and problems with a LH house e.g. service charges for the estate, and permissions for alterations/fees incurred, and sales packs for when we move out?  Do we still have to pay any or all of those or do they disappear with the landlord?

Side note:
I have been avidly following the "fleecehold" scandal around service charges for FREEHOLD new build properties and the associated lack of legal protection that equivalent leaseholders get in terms of things like right to audited accounts for the management company etc.  In this context, would an ex-leasehold freehold property be a better (safer) option as the management company is less likely to be sharky and obscure?

Thanks for any thoughts/musings!
All theoretical at the moment; but we are currently ruling out most new build houses as they are freehold but have service charges tied to the deeds, and these are uncapped and unprotected unlike leaseholders.

greatcrested

If you buy a leashold property, you will be liable for whatever fees and charges are specified in the lease.

As we can't read it, we can't say what they are.

withaspritz

greatcrested said:

If you buy a leashold property, you will be liable for whatever fees and charges are specified in the lease.

As we can't read it, we can't say what they are.

True, the question I was posing is what happens when one buys the freehold, do the fees and charges specified in the lease typically disappear or do they stay?

HampshireH

withaspritz said:

greatcrested said:

If you buy a leashold property, iyou will be liable for whatever fees and charges are specified in the lease.

As we can't read it, we can't say what they are.

True, the question I was posing is what happens when one buys the freehold, do the fees and charges specified in the lease typically disappear or do they stay?

Probably worth amending your original post so those who can help know how to.

Hi,

Looking at a house purchase, and a few new-ish nice looking leasehold houses are on offer for well below budget.  If we budgeted to purchase the leasehold, what happens to the other fees and problems with a LH house e.g. service charges for the estate, and permissions for alterations/fees incurred, and sales packs for when we move out?  Do we still have to pay any or all of those or do they disappear with the landlord?

withaspritz

HampshireH said:

withaspritz said:

greatcrested said:

If you buy a leashold property, iyou will be liable for whatever fees and charges are specified in the lease.

As we can't read it, we can't say what they are.

True, the question I was posing is what happens when one buys the freehold, do the fees and charges specified in the lease typically disappear or do they stay?

Probably worth amending your original post so those who can help know how to.

Hi,

Looking at a house purchase, and a few new-ish nice looking leasehold houses are on offer for well below budget.  If we budgeted to purchase the leasehold, what happens to the other fees and problems with a LH house e.g. service charges for the estate, and permissions for alterations/fees incurred, and sales packs for when we move out?  Do we still have to pay any or all of those or do they disappear with the landlord?

touche - amended!

eddddy

withaspritz said:

Looking at a house purchase, and a few new-ish nice looking leasehold houses are on offer for well below budget.  If we budgeted to purchase the leasehold freehold, what happens to the other fees and problems with a LH house e.g. service charges for the estate, and permissions for alterations/fees incurred, and sales packs for when we move out?  Do we still have to pay any or all of those or do they disappear with the landlord?

If you buy the freehold, you will still be responsible for service charges for communal ares.

But you probably won't need consent for alterations any more, with associated fees. Your buyers will probably want a management pack when they buy.

withaspritz said:

In this context, would an ex-leasehold freehold property be a better (safer) option as the management company is less likely to be sharky and obscure?

I can't really see why that would be the case.

But if there was still a bunch of leaseholders on a development, they might have more power over the management co than a development that only had freeholders.

withaspritz

eddddy said:

withaspritz said:

Looking at a house purchase, and a few new-ish nice looking leasehold houses are on offer for well below budget.  If we budgeted to purchase the leasehold freehold, what happens to the other fees and problems with a LH house e.g. service charges for the estate, and permissions for alterations/fees incurred, and sales packs for when we move out?  Do we still have to pay any or all of those or do they disappear with the landlord?

If you buy the freehold, you will still be responsible for service charges for communal ares.

But you probably won't need consent for alterations any more, with associated fees. Your buyers will probably want a management pack when they buy.

withaspritz said:

In this context, would an ex-leasehold freehold property be a better (safer) option as the management company is less likely to be sharky and obscure?

I can't really see why that would be the case.

But if there was still a bunch of leaseholders on a development, they might have more power over the management co than a development that only had freeholders.

Thanks for the concise answer! 

In relation to the last point, 

But if there was still a bunch of leaseholders on a development, they might have more power over the management co than a development that only had freeholders.

Do I "lose power" over the management company at the point when the freehold is purchased?

rachel230

Firstly you have no rights as a freeholder paying estate fees and service charges, to challenge anything whatsoever. Leaseholders have a small degree (expensive and time consuming) of rights to challenge excessive charges at First Tier Tribunal. The law quite possibly will be changing soon to give freeholders similar rights as leaseholders, but this hasn't happened yet.
If you plan to buy the freehold, you need to look * very * carefully at the ground rent - how much it is and more importantly is it a doubling or rpi increasing ground rent. I suspect it will be one or the other. As the cost of the freehold is based on future loss of ground rent to the freeholder, your freehold could be very expensive to buy. Some are quoted under £10,000, some are quoted over £30,000...
Finally all the attached commitments will remain, often including the permission fees unless your (specialist) solicitor can negotiate for these clauses to be removed for you.
If you join the National Leasehold Campaign Facebook group you can ask people's experiences there.  

withaspritz

rachel230 said:

Firstly you have no rights as a freeholder paying estate fees and service charges, to challenge anything whatsoever. Leaseholders have a small degree (expensive and time consuming) of rights to challenge excessive charges at First Tier Tribunal. The law quite possibly will be changing soon to give freeholders similar rights as leaseholders, but this hasn't happened yet.
If you plan to buy the freehold, you need to look * very * carefully at the ground rent - how much it is and more importantly is it a doubling or rpi increasing ground rent. I suspect it will be one or the other. As the cost of the freehold is based on future loss of ground rent to the freeholder, your freehold could be very expensive to buy. Some are quoted under £10,000, some are quoted over £30,000...
Finally all the attached commitments will remain, often including the permission fees unless your (specialist) solicitor can negotiate for these clauses to be removed for you.
If you join the National Leasehold Campaign Facebook group you can ask people's experiences there.  

Quite terrifying prospect. Finding a house without some sort of trap (fleece hold vs leasehold) is hard enough!

rachel230

Unfortunately that's why it's on at a good price! A lot of these properties have such onerous terms attached to them that many people are unable to sell.
It's awful..

withaspritz

rachel230 said:

Unfortunately that's why it's on at a good price! A lot of these properties have such onerous terms attached to them that many people are unable to sell.
It's awful..

Indeed - and some freehold houses may be ex leasehold, not easy to spot from the Rightmove ads!  Or subject to estate rent charges, again not easy to know and not stated in the £3 land registry downloads