Buying Freehold advice

Emelia8988

Hello,

I'm looking for advice regarding buying the freehold to out 1930s property. The lease is currently 900+ years woth a peppercorn rent of £3.50 per year. 

We pay the ground rent to a solicitors, I don't k own who has the freehold. 

I contacted the solicitors about buying the freehold and hot the following responses: 

'Thank you for your enquiry.  We are currently in the process of preparing a registration of the Wilkinson estate ground rents.

We are not currently instructed in the sale of freeholds/head leasehold interests, but I will retain your details as interested in a possible purchase'

I wasn't sure what this meant, bar they hadn't been instructed to sell. I asked them if they could speak to the free holder about selling as we have no details for them and they responded with this: 

'Until such times as the ground rents are registered at Land Registry I am no able to deal with any issues regarding the freehold.'

Is anyone able to explain to me about the ground rent being registered with the land registry and why it wouldn't be already? 

Thanks in advance

Iguana

I suggest you look at the National Leasehold Campaign website or Facebook page and Leasehold Knowledge Partnership both of which have lots of information. There is also the Leasehold Advisory Service.

NameUnavailable

House or flat?

Peppercorn ground rent is literally a peppercorn (never actually collected so zero in reality). Your ground rent is low, but not peppercorn.

Emelia8988

Iguana said:

I suggest you look at the National Leasehold Campaign website or Facebook page and Leasehold Knowledge Partnership both of which have lots of information. There is also the Leasehold Advisory Service.

Thank you. I will take a look at those.

Emelia8988

NameUnavailable said:

House or flat?

Peppercorn ground rent is literally a peppercorn (never actually collected so zero in reality). Your ground rent is low, but not peppercorn.

Hello, it's a house not a flat. The owners previous to us never actually paid the ground rent, but in order to sell they had to make a payment (which was their first one after living here for 13 years). Since then we have been getting a yearly reminder but they never chase us for it, so I just assumed it was a peppercorn rent. 

I've read some people can buy their lease after 2 years and they don't need permission from the freeholder. So I thought that might be an option.

eddddy

Emelia8988 said:

Hello, it's a house not a flat. The owners previous to us never actually paid the ground rent, but in order to sell they had to make a payment (which was their first one after living here for 13 years). Since then we have been getting a yearly reminder but they never chase us for it, so I just assumed it was a peppercorn rent. 

I've read some people can buy their lease after 2 years and they don't need permission from the freeholder. So I thought that might be an option.

A dictionary definition of a "peppercorn rent" is:

a very small amount of money that you pay as rent

Link https://dictionary.cambridge.org/dictionary/english/peppercorn-rent

It's a bit of a loose term, but £3.50 a year could probably be described as a peppercorn ground rent.  It's nothing to do with whether the rent is collected or not.

(Historically, some rents were literally paid in peppercorns - which is where the term comes from.)




But in terms of buying your freehold... there are 2 ways to do that...

1. Informal negotiation with your freeholder
2. A legal process called "Statutory Enfranchisement"

You've been trying to do option 1. There are no 'rules' for this option. For example...

• You don't have to wait 2 years.
• The freeholder can ask any price they like.
• The freeholder can simply say "no" - which is what your freeholder is doing, via their solicitor

If you go for option 2, there are very strict rules. For example...

• You have to wait 2 years
• A tribunal decides the price
• Assuming the conditions are met - the freeholder cannot say "no"

But the legal fees etc are likely to be much higher for option 2.

Here's some info on Option2 (Statutory Enfranchisement).... https://www.lease-advice.org/advice-guide/houses-qualification-valuation/

Emelia8988

eddddy said:

Emelia8988 said:

Hello, it's a house not a flat. The owners previous to us never actually paid the ground rent, but in order to sell they had to make a payment (which was their first one after living here for 13 years). Since then we have been getting a yearly reminder but they never chase us for it, so I just assumed it was a peppercorn rent. 

I've read some people can buy their lease after 2 years and they don't need permission from the freeholder. So I thought that might be an option.

A dictionary definition of a "peppercorn rent" is:

a very small amount of money that you pay as rent

It's a bit of a loose term, but £3.50 a year could probably be described as a peppercorn ground rent.  It's nothing to do with whether the rent is collected or not.

(Historically, some rents were literally paid in peppercorns - which is where the term comes from.)




But in terms of buying your freehold... there are 2 ways to do that...

1. Informal negotiation with your freeholder
2. A legal process called "Statutory Enfranchisement"

You've been trying to do option 1. There are no 'rules' for this option. For example...

• You don't have to wait 2 years.
• The freeholder can ask any price they like.
• The freeholder can simply say "no" - which is what your freeholder is doing, via their solicitor

If you go for option 2, there are very strict rules. For example...

• You have to wait 2 years
• A tribunal decides the price
• Assuming the conditions are met - the freeholder cannot say "no"

But the legal fees etc are likely to be much higher for option 2.

Here's some info on Option2 

Thank you, this is really helpful. I have tried contacting the solicitors again to see if they will pass on the freeholders name and contact details but they are just not responding.

I think we will take a look into the formal route and see if that's a viable option. 

Thanks again. 

KingL2

do keep us updated, it sounds like a good california soap-opera........ !
bought ours for £10k, 20-odd years ago.
What are you trying to achieve, exactly?  How many £3.50s in £10,000 ?

ThisIsWeird

KingL2 said:

do keep us updated, it sounds like a good california soap-opera........ !
bought ours for £10k, 20-odd years ago.
What are you trying to achieve, exactly?  How many £3.50s in £10,000 ?

How many years were left on your place, may I ask? And was it a communal move, or a single property like Emelia's? 
Thanks.

chrisw

KingL2 said:

do keep us updated, it sounds like a good california soap-opera........ !
bought ours for £10k, 20-odd years ago.
What are you trying to achieve, exactly?  How many £3.50s in £10,000 ?

OTOH the whole street where I lived 20-odd years ago got a letter asking if we'd like to buy the freehold for each of our properties for £250 + legal fees.

Surprisingly few of us said yes, the rest preferred to carry on paying the £8 a year ground rent.