PLEASE READ BEFORE POSTING

Hello Forumites! In order to help keep the Forum a useful, safe and friendly place for our users, discussions around non-MoneySaving matters are not permitted per the Forum rules. While we understand that mentioning house prices may sometimes be relevant to a user's specific MoneySaving situation, we ask that you please avoid veering into broad, general debates about the market, the economy and politics, as these can unfortunately lead to abusive or hateful behaviour. Threads that are found to have derailed into wider discussions may be removed. Users who repeatedly disregard this may have their Forum account banned. Please also avoid posting personally identifiable information, including links to your own online property listing which may reveal your address. Thank you for your understanding.

Any risks for me? (Buying SO / Leasehold to Freehold)

AJ85
AJ85 Posts: 16
First Post First Anniversary Combo Breaker
Forumite
edited 7 December 2023 at 10:29AM in House buying, renting & selling
Hi!

House I'm keen on buying currently owned under shared ownership leasehold. Seller is apparently staircasing so up on completion will be sold as freehold to me (obviously if happened to agree fee etc).

The agent (an centralised office / online type place), suggests this is normal enough and not to worry.

Is that likely the case? Apparently owner has been moved out for a couple of months, I'm not interested in buying leasehold or taking on any kind of shared ownership and only want to buy as freehold. Its being sold as 'no chain' as seller already has situated elsewhere

My position if it makes any odds is to buy with mortgage (not my first home), no chain

Comments

  • kingstreet
    kingstreet Posts: 38,616
    First Anniversary Name Dropper Photogenic First Post
    Forumite
    As long as the HA is happy to sell the freehold interest, this is quite normal. FWIW some HAs don't sell the freehold on certain properties for some reason unknown to me.
    I am a mortgage broker. You should note that this site doesn't check my status as a Mortgage Adviser, so you need to take my word for it. This signature is here as I follow MSE's Mortgage Adviser Code of Conduct. Any posts on here are for information and discussion purposes only and shouldn't be seen as financial advice. Please do not send PMs asking for one-to-one-advice, or representation.
  • eddddy
    eddddy Posts: 16,159
    First Anniversary First Post Name Dropper
    Forumite

    It would be similar to buying any other freehold house.

    Is it on an estate/development? If so, you'll probably have some covenants which are similar to the covenants for the leasehold houses.

    For example, there could be covenants about...
    • Contributing to the cost of maintaining shared areas (e.g. private roads, car parks, grassed areas, play areas, etc)
    • Changing the appearance of your house
    • Where you can and cannot park
    • Parking vans / commercial vehicles
    • Where you're allowed to play ball games
    • etc

    But leasehold covenants that don't impact other residents should be removed. For example,
    • Banning sub-letting
    • Consent for internal alterations

    One downside of owning a freehold house is that leaseholder protection laws don't apply to you. The main example is that it will be much harder for you to challenge maintenance charges, than for your leasehold neighbours.



  • AJ85
    AJ85 Posts: 16
    First Post First Anniversary Combo Breaker
    Forumite
    Thanks guys, I've done some further digging (it's on a 3 year old Taylor Wimpey site), been assured they have rights to buy out the lease and complete as freehold which can be written in up on exchange of contracts as a required condition for completion of sale

    New risk sadly - its for sale via Springbok who look to ask for 2.5k deposit prior to exchange, £400 exclusivity agreement contract cost to take it off the market.  Presumably all in an attempt to stop a prospective buyer pulling out, and vice versa, I need to look these up on the forums to see what's mentioned about this company!
  • eddddy
    eddddy Posts: 16,159
    First Anniversary First Post Name Dropper
    Forumite
    edited 7 December 2023 at 4:52PM
    AJ85 said:

    New risk sadly - its for sale via Springbok who look to ask for 2.5k deposit prior to exchange, £400 exclusivity agreement contract cost to take it off the market.  Presumably all in an attempt to stop a prospective buyer pulling out, and vice versa, I need to look these up on the forums to see what's mentioned about this company!

    Here are some general comments about pre-contract deposits and exclusivity agreements. (I'm not commenting on the company you mention, because I don't know them.)


    I'd suggest, it's generally best to avoid pre-contract deposits and exclusivity agreements - especially when they are drawn up by estate agents.

    The reasons include...
    • There might be some 'nasty' problem with the house which the seller has kept quiet about. When you find out, you'll want to walk away - so you lose your £2.9k
    • The seller might decide they don't want to sell the house after all - so they stall until the exclusivity period is finished - then they walk away - so you lose your £2.9k
    • The £2.5k might go to the estate agent if you walk away. So the estate agent might be keen to help the sale fall though, so that they can get another £2.5k from another buyer, and so on.

    If you're tempted to hand over £2.9k, I'd suggest that you show the deposit agreement to your solicitor first, to see what they say.


  • AJ85
    AJ85 Posts: 16
    First Post First Anniversary Combo Breaker
    Forumite
    Appreciate the sensible advice. The house in question is only 3 years old and is supported by nhbc warranty so I'm not overly concerned re survey findings. The agent on the phone (only verbally) said to me if seller pulled out I'd get my full 2.5k deposit back, but not the £400 contract fee. Skeptical but like you say, see what the agreement looks like and put under the nose of legal.

    Really glad I nipped on here to ask, very articulate sound responses!!
  • eddddy
    eddddy Posts: 16,159
    First Anniversary First Post Name Dropper
    Forumite
    AJ85 said:
    The agent on the phone (only verbally) said to me if seller pulled out I'd get my full 2.5k deposit back, but not the £400 contract fee. 

    As you can imagine, a seller won't necessarily admit that they are pulling out.

    For example, if a seller gets a higher offer from somebody else - the seller might just stall, become unhelpful, and generally mess you about until you give up and pull out (or the exclusivity period expires).

    That way, the seller blames you for pulling out; the seller denies breaching their contract with you; the seller sells to somebody else for more money; and you lose £2.5k.

    (Unless you try taking the estate agent to court to claim your £2.5k back - and you might or might not win.)


Meet your Ambassadors

Categories

  • All Categories
  • 341.9K Banking & Borrowing
  • 249.7K Reduce Debt & Boost Income
  • 449.2K Spending & Discounts
  • 234K Work, Benefits & Business
  • 606.2K Mortgages, Homes & Bills
  • 172.5K Life & Family
  • 246.9K Travel & Transport
  • 1.5M Hobbies & Leisure
  • 15.8K Discuss & Feedback
  • 15.1K Coronavirus Support Boards