PURCHASE FREEHOLD

sammahoney

Hi I’m a first time buyer. 

Me & my partner are going through purchase process of buying a lease hold held by simarc property management. 

I am aware and saw all the bad scary negative reviews so this is a very worrying concerning position to be in. 

I’m aware when we exchange contracts I can pay £120 for a quote to see how much it will cost to buy the free hold of them, but was wanting some advise / guidance on the process & any additional costs / fees might be involved 

if anyone can help would really appreciate it as I have saw how bad this company is meant to be for ripping people of and taking money and with being first time buyers this is all very new to us.

thanks Sam 

quotememiserable

First of all, leashold doesn't have to be scary at all - it depends how long the lease is. Is it a house or a flat, and how long is the lease - if you don't know you must find out from the agent. Most older leasehold houses have 999 year leases which is no concern at all, and almost always the freeholder will sell to you for a fairly modest sum, which they'll tell you for free.
If it's a shorter lease, it's a different story.

sammahoney

Hi it’s a house we’re purchasing 

the lease has 914 years left remaining 

yes the company who currently own it are simarc property management (who from looking reviews online seem to rip people off and have loads of negative bad reviews) 

im aware it’s £120 to get a quote of them first, but not sure of the process after that & if it includes additional fees, 

will I have to get a solicitor to go through this process aswell?

thanks for your help 

Sam 

eddddy

sammahoney said:

I’m aware when we exchange contracts I can pay £120 for a quote to see how much it will cost to buy the free hold of them, but was wanting some advise / guidance on the process & any additional costs / fees might be involved 

Who told you to wait until exchange of contracts before getting a quote for the freehold (was it a dodgy estate agent)?

Wouldn't you prefer to know how much the freehold would cost before exchange of contracts?

Then if it's more money than you expect (or can afford), you've got the option to reduce your offer for the house, or walk away etc.


But Simarc probably won't talk to you, as you're not the property owner. So you need to ask the seller to arrange for a quote, before exchange of contracts.

Simarc will quote a price for the freehold and they will want you to pay their legal fees. Hopefully, they will give you a fixed fee quote for the legal fees. You'll also have to pay your own legal fees.


A dodgy estate agent might try to dissuade you from doing it this way - because it will delay things, and if  the freehold is really expensive, you might walk away - leaving the estate agent with no commission.


(FWIW, the price quoted by Simarc won't be binding - until you sign a contract with Simarc. Until then, they can change the price.)

sammahoney

Hi eddy,

Simarc property management have said the home owner had to pay £120 for a quote & also the home owner informed me of this because she enquired with them for me also the process of buying the free hold. 

They said the process is pay £120 for a quote it lasts 10 days so once we have quote need to decide within the 10 days if want to buy or not … it’s quite hard because we won’t be able to get a quote until we’re the home owners 

the current homeowner has said she’s been with them for 21yrs never had any issues with them but I’ve saw loads of bad reviews online so very concerning 

tacpot12

You should do some more research to understand what the ground rent is, and what conditions are attached to the ground rent, e.g. how can it increase over time. Buying the freehold will free you from paying the ground rent, and this will avoid any risk that increases to the ground rent would make your home unsalable. But, I would also check about what other charges  you will have to pay if you buy the proeprty, and which, if any will you be free of if you buy the freehold. If you are still going to be stuck with very high estate service charges, then buying the freehold might not be the answer you are hoping it is.  

eddddy

sammahoney said:

They said the process is pay £120 for a quote it lasts 10 days so once we have quote need to decide within the 10 days if want to buy or not … it’s quite hard because we won’t be able to get a quote until we’re the home owners 

Would the price for the freehold affect your decision to buy the leasehold house?

For example, if the freehold cost £5k or £10k or £20k or £40k - would you still buy the leasehold house in any case?


Or would it be worth telling the seller that you need them to get a quote before you exchange contracts - even though it costs you £120?

You can then pay another £120 for an updated valuation when you're ready to buy the freehold.

sammahoney

Well we only have a certain budget to be able to buy the freehold, so worse case if they quote us crazy amounts we would have to just leave it as it is and have them keep it & we just purchase the house & pay out grand rent which is £2.80 a year and has been last 21yrs

the home owner thinks I’m a abit crazy wanting to buy the freehold & Said really don’t think it’s worth it etc 

But it’s just what I’d prefer to have peace of mind so they can’t increase there ground rent all of a sudden to silly amounts and rip us off etc 

eddddy

sammahoney said:

Well we only have a certain budget to be able to buy the freehold, so worse case if they quote us crazy amounts we would have to just leave it as it is and have them keep it & we just purchase the house & pay out grand rent which is £2.80 a year and has been last 21yrs

the home owner thinks I’m a abit crazy wanting to buy the freehold & Said really don’t think it’s worth it etc 

But it’s just what I’d prefer to have peace of mind so they can’t increase there ground rent all of a sudden to silly amounts and rip us off etc 

The cost of the freehold is related to the amount of the ground rent.

If the ground rent is £2.80 a year for the full term of the lease, the freehold should only cost a few hundred pounds.

The freeholder can only increase the ground rent if the lease says so. But if the lease says the ground rent will increase, the freehold will cost more.


The main reason for buying a freehold in your circumstances would be to free you from the terms of the lease. For example, most leases say you need consent for alterations and extensions. 

So, for example, you might have to pay Simarc £500 or £600 for permission to replace a window, build a conservatory, put a shed in the garden, etc.


(Before buying the freehold, it's best to check all those details with a specialist solicitor. Some freeholders try to get around that, by transferring covenants into the Freehold title.)

Chandler85

Sounds like an older house that has a ground rent that cannot be increased and there may be no restrictions on the house either, it tends to be newer leasehold that have the issues with increasing rent etc,  Basically when someone realised they could charge people lots of money and so everyone started doing it

Some places have chief rent as well, even when you own the freehold, which was created with no way of it being increased, an old house I had, we paid £1.20 a year in chief rent...

Buy a copy of the freehold and leasehold for the property from the land registry and have a read of it.