Buying the freehold on my block of flats

eddddy

That lease is between 2 parties - a Landlord and a Tenant. So it is not tripartite.

But it seems to be a sub lease, with a superior head lease.

If you're being offered the freehold, what's happening to the head lease?

Or are you being offered the head lease and not the freehold?

You probably need to hand all the documents over to a solicitor, and ask them what you are being offered, and what the benefit to you would be in buying whatever is being offered. It's not at all clear from the info you've posted.

textbook

eddddy said:

That lease is between 2 parties - a Landlord and a Tenant. So it is not tripartite.

But it seems to be a sub lease, with a superior head lease.

If you're being offered the freehold, what's happening to the head lease?

Or are you being offered the head lease and not the freehold?

You probably need to hand all the documents over to a solicitor, and ask them what you are being offered, and what the benefit to you would be in buying whatever is being offered. It's not at all clear from the info you've posted.

Definitely.  And thxs.   The solicitor who hopefully will deal with it has dealt with the block before and some of the leases are not legit (in his opinion)  it's an unusual system of two leases running concurrently.  My solicitor was confused but said it's fine this guy says that because the headlease company wasn't notified it's not legit so I may need to get my lease rectified (if I sell).

Short term, do you think just show everyone the figures depending on how many opt in and crack on.  We are running out of time.  If there's an issue like the ones you've raised I can run it through the solicitor in the next few weeks?

The thing is faff around now it won't get done at all.

BTW,  what would be your breakdown for lease extenders to pay compared to Short lease holders?  My neighbour just paid £20,000 and wants it lower for him/me.  But I need a figure?

eddddy

textbook said:

BTW,  what would be your breakdown for lease extenders to pay compared to Short lease holders?  My neighbour just paid £20,000 and wants it lower for him/me.  But I need a figure?

Assuming that £20k was a fair price for a statutory lease extension, he should pay about £20k less than the others.

So for example that might mean:

• Those who have extended their leases (using the statutory route) might pay £500 towards the freehold purchase

• Those who haven't extended their leases might pay £20,500 towards the freehold purchase

In simple terms, that's how freehold valuations work.




(But if the neighbour was 'ripped off' and paid £20k for a lease extension that was only worth £12k - he should pay £12k less than those who haven't extended their leases.)



Edit to add...

TBH, flats that have had statutory lease extensions are pretty much worthless to Freehold Investors. £500 is probably an over valuation.

textbook

Ok.  I knocked this up-  

My lease extension also was only done ten years ago so on 116 years you think I shouldn't worry about the freehold either?   I thought it would increase the value of my flat so worth say £5000

textbook

Just had the meeting.   We've agreed that lease extenders pay less so my neighbour will pay £4780 and the lady with 48 years will pay £6300 approx.  We all pay the same for the first 80% then last 20% depends on how long your lease is.

Another guy with a lease extension thinks it's good to have the freehold because it becomes a freehold property not leasehold so a no brainer in increasing its value.

We've got ten people interested but think what it says on the letter from the solicitor is over 50% so need 12.  I've gotta get two more.  Check photo to see this confirms 12 people ?

eddddy

You really need to get a freehold valuer to do these calculations.

I don't know where you got £31 or 421 years came from - but that's nothing like how you do a freehold valuation.

A freehold valuation is based on how much the each flat is worth to an investor.


So for example...

• If a flat worth £300k had a statutory lease extension - say 170 years remaining at £0 ground rent - the formula says an investor might pay around £50 for that

• If a flat worth £300k had 80 years remaining at £250 per year ground rent - the formula says an investor might pay around £10,000 for that

textbook

Is this true?  Sent from neighbour-

I had this today -

Good morning,

My name is xxxxx and I am the owner of flat 18 xxxxxc Court. I can't attend the meeting today.  Companies this days are trying to sell the freehold to flat owners as they know that it will decrease in value due to government planning to change the law. I have exactly the same situation with my other flat and here owners decided not to buy but wait until for new law as we think that the price will go down. Anyway that's my opinion, but I will be happy to follow what the flat owners of xxxxx Court will decide.


The solicitor basically said main reason to get it is to get cheaper lease extensions, which is still true right?

eddddy

textbook said:

Is this true?  Sent from neighbour-

I had this today -

Good morning,

My name is xxxxx and I am the owner of flat 18 xxxxxc Court. I can't attend the meeting today.  Companies this days are trying to sell the freehold to flat owners as they know that it will decrease in value due to government planning to change the law. I have exactly the same situation with my other flat and here owners decided not to buy but wait until for new law as we think that the price will go down. Anyway that's my opinion, but I will be happy to follow what the flat owners of xxxxx Court will decide.


The solicitor basically said main reason to get it is to get cheaper lease extensions, which is still true right?

Because you've been served a section 5d notice, the answer to that question is very, very complicated.

You probably need to focus on understanding the basics first.



FWIW, it sounds like you're giving the lady with the 48 year lease a fantastic deal - she should be tearing your arm off to get that.

It sounds like everyone with longer leases is overpaying in order to subsidise that lady.

textbook

I agree the shorter lease holders need to pay more if 12 go for it say the longest leaseholder £4800 and shortest £6500 .  Estimates.

I dunno about all the new government legislation-  but if we get it , can we get rid of the rip off management company- Foxes?  

And will the getting new leases (we give 999 years)be cheaper, or will we set our price or is it a set formula?

Have to be 50% paying in?

I dunno if I've asked this before but getting pressed on all this