Freehold and the upcoming reform

theshoefairy

Hi all, I will try to keep this brief by using bullet points.

Inherited house from late mother, no mortgage - Leasehold
Letter in September from property management company stating freeholder selling interest at auction for 50k plus
Hired a survey - Valued at 22k
Solicitor served notice beginning of December
Then I heard about the reform....
I emailed surveyor to ask if delaying the process would benefit me - His reply was basically no because marriage value was not included in his calculation so his valuation would not change.

Are there any other benefits apart from getting rid of te marriage value if I waited slightly? Such as paying freeholders fees? Etc? 
Any advice would be greatly appreciated.

princeofpounds

This is about the tenth time his has come up on the board...

All the government have done is announce an intention to introduce some unspecified reforms. All we know is that they have looked at a Law Society report and will probably adopt some of the suggestions, but certainly not all. Plus the Minister made a vague statement that some minor measures may be introduced in the next parliamentary session, but the bulk of the reforms would be made 'in due course' (i.e. we are talking years, not months).

Plus, marriage value may well be abolished, but that may mean it is just being replaced by another method of freeholder compensation, not cut to zero.

So there is almost zero visibility on what is changing and when it's changing. Which is why the surveyor has told you what they have told you.

So unless you are interested in waiting, at a guess, 1-5 years, for more clarity, then you may as well proceed.

eddddy

theshoefairy said:

Hi all, I will try to keep this brief by using bullet points.

Inherited house from late mother, no mortgage - Leasehold
Letter in September from property management company stating freeholder selling interest at auction for 50k plus
Hired a survey - Valued at 22k
Solicitor served notice beginning of December

FWIW, if your surveyor/valuer is correct - and you can use 'Statutory Enfranchisement' to buy the freehold for £22k - it won't sell at auction for £50k plus.

Nobody would pay £50k for a freehold at auction which they can then be forced to sell to you for £22k. 

(TBH, if your surveyor is correct, I'd have thought an investor might pay around £15k at auction - and maybe plan to put the freehold away in drawer in the hope of making a £7k profit at some point in the future.)


So it sounds like one of the following...

• the freeholder is fibbing to you (maybe to try to get you to pay over the odds),
• or there's a misunderstanding somewhere,
• or the 2 valuers (the freeholder's and yours) are using different assumptions. They will each argue their case, and it may need an (expensive) tribunal case to decide who's right.

theshoefairy

Thank you both.
Well,  I was advised that the auction was taking place on 17th December. I registered for the auction site to keep an eye on things, but it was never listed for sale. There is a house around the corner from me which has the same freeholder - I believe the house is vacant) and they entered that listing, they were asking 45k plus but it didn't sell at all. So god knows what they are playing at!

Also, the FH hasn't had the freehold of my house valued. They have not formally replied to the notice served, but my solicitor advised that he had a phone call last week from someone last week claiming to be a representative of the freeholder, saying they had received the notice and asked what they should do next. 

princeofpounds

The Freeholder sound pretty amateur. Your surveyor would have used an appropriate valuation methodology, so the price you pay should be close to that (could be tolerated a bit higher if the freehold agrees to sell it direct to you without going to Tribunal, as you save on the fees and time). Your solicitor should be able to guide you through the process without too much trouble. Hope it goes well!

theshoefairy

Thank you. The freeholder has been in business for years so I am not able to believe they don't know what they are doing. I spoke previously to another surveyor and he told me that they are a nightmare, dragging things out and not turning up to tribunal. 

AdrianC

theshoefairy said:

Letter in September from property management company stating freeholder selling interest at auction for 50k plus

This means...
"Letter frantically hoping you won't do your homework and will pay way over the market value because you've got spooked by press reports about leasehold"