Concerned about venerable man with less than 50 years on his lease

JackSprout

anselld said:

JackSprout said:

Yep I that's what it looks like to me, hence my concern if it was limited to that I don't think I would have an issue, bit underhand and if that's the only way you can make money, well then that's a bit sad, but its not limited to that is it.

Well it is limited to that though, at least any time soon.  Someone in their 70s on a short lease is clearly not intending to seek an extension so is not a financial opportunity.  Someone who has already served s42 on the other hand has clearly signalled their intention to renew which is an opportunity for an experienced freeholder with access to the right surveyors etc.

You probably shouldnt consider buying a leasehold if you are this suspicious of freeholders.

What do you mean by "Someone who has already served s42 on the other hand has clearly signalled their intention to renew which is an opportunity for an experienced freeholder with access to the right surveyors etc."

anselld

JackSprout said:

anselld said:

JackSprout said:

Yep I that's what it looks like to me, hence my concern if it was limited to that I don't think I would have an issue, bit underhand and if that's the only way you can make money, well then that's a bit sad, but its not limited to that is it.

Well it is limited to that though, at least any time soon.  Someone in their 70s on a short lease is clearly not intending to seek an extension so is not a financial opportunity.  Someone who has already served s42 on the other hand has clearly signalled their intention to renew which is an opportunity for an experienced freeholder with access to the right surveyors etc.

You probably shouldnt consider buying a leasehold if you are this suspicious of freeholders.

What do you mean by "Someone who has already served s42 on the other hand has clearly signalled their intention to renew which is an opportunity for an experienced freeholder with access to the right surveyors etc."

You stated in your firstpost "Notice 42 has been presented to the Freehold owner".  Notice 42 (s42) is the notice Leaseholder serves on Freeholder to request a statutory lease extension.  It is served prior to sale because any new buyer would need to own for 2 years before they have the right to serve it themselves.   Presumably it has been served because the auction flat also has a short lease and it is a fair bet that any successful purchaser would wish to extend at the earliest opportunity.

Interestingly the existing freeholder may be trying to exit the freehold now to avoid the proposed Government reforms to the calculation of lease renewal.  It is a gamble for both the buyer and the seller as far as the freehold is concened.

JackSprout

I don't know if this is relevant but the property in question  also in the auction states:
"A Section 42 Notice of the Leasehold Reform, Housing and Urban Development Act 1993 to extend the lease has been served on the Landlord, please see the legal pack for further details"
Where as another property in the auction also with a short tenancy states:

A section 42 notice has been served on the freeholder the benefit of which will be assigned to the purchaser

??

MovingForwards

Several years ago a will was drafted for someone in their 70s, they lived in a leasehold flat and hadn't extended it; they couldn't afford to and due to their age they didn't expect it to be a problem in their lifetime. They were concerned when the property passed to their child it would be difficult to sell. A discussion was held about simultaneously extending the lease while completing the sale, using the money from the sale to do so. Property value would be higher, enough to cover the lease extension and not a problem for the child or new buyer. Person was happy, letter explaining it was sent so child could see and the will was drafted, then subsequently signed.

It's a non-issue, find another property or chase freehold sales then hope a property pops up in the building. 

Slithery

JackSprout said:

I don't know if this is relevant but the property in question  also in the auction states:
"A Section 42 Notice of the Leasehold Reform, Housing and Urban Development Act 1993 to extend the lease has been served on the Landlord, please see the legal pack for further details"
Where as another property in the auction also with a short tenancy states:

A section 42 notice has been served on the freeholder the benefit of which will be assigned to the purchaser

??

Not relevant at all, they both mean exactly the same thing. If a Section 42 Notice has been served on the freeholder before a leasehold property is sold it just means that the new owner doesn't need to wait the statutory 2 years before applying for a formal lease extension.

AdrianC

JackSprout said:

Does no one actually see that this is just wrong?

What is?

The freehold is being sold?
It doesn't affect Jack's lease.

Jack has a short lease?
He's had 30+ years to extend it. It's not going to be an issue for him during his life.

Or...?

princeofpounds

JackSprout said:

Does no one actually see that this is just wrong?

If you feel that way, why don't you go and see Jack and talk it through with him? You may find he has considered all this already and doesn't fancy shelling out tends of thousands for no benefit in his lifetime. You seem to have missed the point that there is a big difference between cashflow and illiquid assets. There is no point being a bit better off in death by spending less when you are living, unless you are prioritising the inheritance you want to leave somebody else above your own welfare.

When it would have actually been most beneficial to extend the lease - around the 80 year mark to avoid marriage value - Jack would have been in his 40s. Not elderly, presumably fully able to manage his own affairs.

Maybe he is now disadvantaged in knowledge relative to a 32yr-old with higher education. But he probably also paid about a third of the house price in real terms than they do, so I'm not sure he's had it all bad, and I don't see anyone advocating for inter-generational fairness on that score.

JackSprout

Thank you for your response, I will reflect on that.

eddddy

JackSprout said:

Just seems a case of nothing is wrong, but everything is wrong, someone is going to make money out of this and it wont be Jack, he's just an element of what seems to me to be a sick systems that appears to benefit everyone except Jack and his heirs. This would not happen if Jack was 32 and had a higher education.

JackSprout said:

Does no one actually see that this is just wrong?

It sounds a bit like you're saying "I don't understand what's going on, but I think it's bad - and I can't explain why".

Tbh, it sounds like you're working yourself up into a state over a problems that you are imagining exist - but don't really exist.  From your comments, I'm not sure that you fully understand leases and leasehold law. 

Personally, I would suggest that you don't talk to a vulnerable elderly person like Jack about this. I would worry that you don't understand enough about leases, and your fears sound a little bit irrational. So you might scare Jack unnecessarily. 

JackSprout

I'm pretty sure I do understand the laws well enough to say that Jack has some rights here but if they are not explained to him he will miss out, to the advantage of someone else, e.g. not him.
I am trying to look out for the old fellow as well, and I appreciate the forums interest in the subject and all your responses. Also I am well aware that any undue interference could scare or stress Jack, your point is not lost on me in that regard.
After all said and done if the Freehold moves to another party then Jack will still live out his days in the flat and if he does sell he will get market value, and he has presumably enjoyed spending the X amount he could have used to buy the Freehold in his youth, so he has had his jam (fair play), and the point about inter-generational advantage is also a good point.
So then it just leaves the new Freeholders treatment Jack going forward, which as I understand it cant deviate too much from the current situation, and I'm sure the new Freeholder is more interested in the long term return of the Freehold than short term ground rent increases, but if he doesn't like the new terms then I guess he will have to buy the Freehold of the new owner.