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  • FIRST POST
    • MSE Jenny
    • By MSE Jenny 8th Mar 12, 1:54 PM
    • 1,221Posts
    • 3,555Thanks
    MSE Jenny
    Buy Your Freehold - guide discussion
    • #1
    • 8th Mar 12, 1:54 PM
    Buy Your Freehold - guide discussion 8th Mar 12 at 1:54 PM



    Hi all, we've written a new Buy The Freehold guide to help you buy your freehold or get the right to manage.

    How did you find the info? If you've done it, how did it go and do you have any other tips you'd add? How much value do you think it added to your property?

    Thanks
    for your help!


    MSE Jenny

Page 8
    • megaginge
    • By megaginge 6th Oct 17, 5:25 PM
    • 346 Posts
    • 287 Thanks
    megaginge
    There is no reason to be anxious, you have 732 years left on the lease. Long enough for the new owners and many generations of their heirs to not have to be concerned about renewing the lease. The only downside of owning the leasehold estate of a house - and there may be others, I am no expert - is if you want to alter or extend the property you will need permission from the freeholder. Probably not a problem, however, you will need to pay the freeholders surveyors and solicitors costs in order for them to make the decision. That may put some folk off, again as in MaryMay's situation I would have expected your solicitor to have informed you of this before you purchased. Having said that, there may be a clause in your lease which allows extensions and alterations as long as you comply with all statutory requirements e.g. planning and building control permissions, check your lease.

    You will probably find all the info you need on the government-funded leasehold advisory website.

    It is unlikely that the two people named on the freehold title are the freeholders when the lease was created. The title would have been passed down to their heirs when they died and probably sold on or passed down through the generations of the family. It could have been that they both died intestate - i.e. without Wills - but there would have to be no surviving relatives who knew about the title. You know what they say, where there is a will, there's a relative
    Originally posted by GTG
    Can the poster not apply for a Vesting order in this circumstance and take control of the freehold in that way?
    Hello There.
    • SouthCoastSkies
    • By SouthCoastSkies 9th Jan 18, 2:34 PM
    • 39 Posts
    • 76 Thanks
    SouthCoastSkies
    Hi,
    I've just received a notice to say that the freehold interest of the flat I own (well, mortgage) is for sale. I've been notified of my right to first refusal with 2 months notice. After this time, the proposed purchaser is an owner of three of the flats within the building.

    I'd like to be part of the purchase of the freehold, but given that one of the other leaseholders is already the interested party, I'm not clear how I then go about proposing that I be part of the freehold purchase. Would I just propose that I enter into a joint arrangement with them ?

    Thanks in advance for any guidance !
    • GTG
    • By GTG 9th Jan 18, 3:23 PM
    • 423 Posts
    • 56 Thanks
    GTG
    Typically when more than one party purchases a freehold of a block of flats a limited company is formed to hold the asset. Assuming there are no other leaseholders interested then a simpler method is to have a Deed of Trust between the two of you. Both structures set out the ownership details, the rights and responsibilities and how it is to be governed etc.

    You could call the people you received the notice from, presumably the current freeholders solicitors and you should get some advice off them. However, you really need to speak to your solicitor as your going to be needing him/her to act on your behalf whether you purchase with the party mentioned or him and other leaseholders in the block.

    Alternatively, you could call the leaseholders advisory service for free. There's a link to the website in my post above. Expect to be held in a long queque though!
    • SouthCoastSkies
    • By SouthCoastSkies 10th Jan 18, 11:39 AM
    • 39 Posts
    • 76 Thanks
    SouthCoastSkies
    Thank you very much, your reply was very helpful. I was confused whether I could be included in the purchase of the freehold if it were just myself and the other leaseholder that were interested. I hadn't considered a Deed of Trust, so will contact the managing agent & suggest that as a possible route. My thanks again.
    • GTG
    • By GTG 10th Jan 18, 5:51 PM
    • 423 Posts
    • 56 Thanks
    GTG
    No problem. The freehold may already be held in a limited company but I doubt if it will be suitable for you both to purchase. If after the notice period only the two of you are interested in buying you will need to get together with the other party and agree on a solicitor to appoint for the conveyancing. Together you can then seek advice from the solicitor as to which is the best legal structure to use.

    There are advantages and disadvantages with both structures and the solicitor job will be to help you to make an informed decision. The limited company will be more expensive and requires a fee (about 30)and an annual return form filling, easy for a layperson to do. Cost should not be the deciding factor but rather what is most legally suitable to protect both of your interests. As you don't know each other I suspect that the solicitor will advise you to form a limited company.

    If you do complete the purchase and you are kind enough to share I would be interested to know what route you took.
    • Stepheny
    • By Stepheny 8th Feb 18, 7:50 PM
    • 2 Posts
    • 0 Thanks
    Stepheny
    Hi could do with a bit of advice on buying the freehold on our house. Is it best to deal directly with the freeholder ( I've read a few reviews on my particular freeholder company and they are not good reviews!) Or would we be better off going thru an independent business who specialise in helping us leaseholders to buy the freehold. We know that we have to pay for their service, just want to know which is the best option. Thanks
    • eddddy
    • By eddddy 8th Feb 18, 8:49 PM
    • 6,468 Posts
    • 6,357 Thanks
    eddddy
    Hi could do with a bit of advice on buying the freehold on our house. Is it best to deal directly with the freeholder ( I've read a few reviews on my particular freeholder company and they are not good reviews!) Or would we be better off going thru an independent business who specialise in helping us leaseholders to buy the freehold. We know that we have to pay for their service, just want to know which is the best option. Thanks
    Originally posted by Stepheny
    What type of independent business do you mean?

    There are valuers who will give you a valuation for the freehold, and solicitors who will do the legal stuff. Is that what you mean?
    • GTG
    • By GTG 8th Feb 18, 10:48 PM
    • 423 Posts
    • 56 Thanks
    GTG
    You've answered your own question in your post.

    I've read a few reviews on my particular freeholder company and they are not good reviews!
    If the integrity of your freeholder is in doubt why as a layperson would you want to deal directly with him/her/them? Even if they were of good standing this is a business transaction to them and they will want to obtain the highest price possible. It is almost guaranteed that they will have professional people working on their side. By law, leaseholders of flats can compel the freeholder to sell the freehold and have protection by the law in the case of any dispute. I suggest you investigate to see if there is anything in place to protect leaseholders of houses.
    Last edited by GTG; 08-02-2018 at 11:05 PM.
    • Joanthebone
    • By Joanthebone 9th Feb 18, 6:33 AM
    • 246 Posts
    • 757 Thanks
    Joanthebone
    Hi, my only experience is in lease extension for a property over commercial premises.

    I got a leasehold valuer to start the process, he was very helpful and liaised with the freeholder for me. He got a very good outcome for me. If the freeholder will not co-operate there is always the Tribunal to go to, although my valuer told me it was best avoided and he rarely had to go that far to get a good deal!

    I had to pay for my own valuation, the freeholders valuation, all the solicitors fees and for the extension which all came to 12,000 but it was worth every penny. The freeholders started off wanting to extend the 65 year lease to 99 years and add hefty service charges (which I had never had before) doubling every 10 years! I got an extension of 150 years and no service charges, just peppercorn ground rent. (1)

    My advice is to get a good leasehold valuer! Good luck!
    • Stepheny
    • By Stepheny 10th Feb 18, 11:35 AM
    • 2 Posts
    • 0 Thanks
    Stepheny
    edddy
    Hi, they are a leasehold valuation independent business that specialise in helping leaseholders buy the freehold. They posted a flyer thru our door. I remember my old neighbour going with a company this way a few years back, every thing went well. Unfortunately we were not in a finical position back then to look into buying ours. From reading the flyer it looks like they sort every thing out. They receive no fee or payment until the conveyance has been completed.
    • eddddy
    • By eddddy 11th Feb 18, 11:08 AM
    • 6,468 Posts
    • 6,357 Thanks
    eddddy
    Hi, they are a leasehold valuation independent business that specialise in helping leaseholders buy the freehold. They posted a flyer thru our door. I remember my old neighbour going with a company this way a few years back, every thing went well. Unfortunately we were not in a finical position back then to look into buying ours. From reading the flyer it looks like they sort every thing out. They receive no fee or payment until the conveyance has been completed.
    Originally posted by Stepheny
    How much are you expecting to pay for the freehold?

    Typically, you might use a freehold valuer (who would be regulated by RICS - the Royal Institute of Chartered Surveyors) and a solicitor (who would be regulated by the SRA - the Solicitors Regulation Authority).

    But you could use another businesses instead to do most of the work - and they don't have to be regulated by anyone.

    Those other businesses might be excellent at doing freehold enfranchisement or they might be rubbish. They might charge less or they might charge more.

    If you know somebody who's had a good experience with this company that's a good sign.

    Maybe speak to a few firms to compare fees, and to see who you like best.



    There's also some good info here:
    https://www.lease-advice.org/advice-guide/houses-qualification-valuation/
    https://www.lease-advice.org/faq/i-own-a-leasehold-house-how-do-i-buy-the-freehold/
    • Janzzz
    • By Janzzz 24th Apr 18, 1:44 PM
    • 31 Posts
    • 2 Thanks
    Janzzz
    Appraisal
    Hello,
    I'm a bit lost, since we got a mortgage 10years ago with a short lease flat - 63 years and now when we want to sell it, I hear for the first time about not being able to sell it it, because noone will get the mortgage for flat with 53 years lease. ...also, no-one ever told us about 'marriage value' - I have actually heard about it for the first time here on moneysavingexpert.
    Anyway, please, could you tell me the realistic value difference if
    The lease is only as is 54years
    If I extend it by 90years = 144years
    Or if I buy the freehold?
    The same flat next to us was sold for 400k but it was freehold.

    The last question is - Do I have to pay freeholder for telling me how much they want for the freehold or extended leasehold? I'm asking them last few years and they never reply - telling me I should hire a surveyor for the appraisal - but I just want them to tell me what is their expectation.

    Thank you so much for your advice.
    This is the best forum!
    • eddddy
    • By eddddy 24th Apr 18, 3:54 PM
    • 6,468 Posts
    • 6,357 Thanks
    eddddy
    Anyway, please, could you tell me the realistic value difference if
    The lease is only as is 54years
    If I extend it by 90years = 144years
    Originally posted by Janzzz
    It's probably best to ask local estate agent(s) who know prices in your area.

    Tell the estate agents that you are thinking of selling, and are unsure whether to extend the lease first.

    Or if I buy the freehold?
    The same flat next to us was sold for 400k but it was freehold.
    Originally posted by Janzzz
    You cannot buy/own the freehold of a single flat. You can only buy/own the freehold of a whole building.

    Who currently owns the freehold of the building? (The freehold of the building might be owned by one or more of the other leaseholders.)

    The last question is - Do I have to pay freeholder for telling me how much they want for the freehold or extended leasehold? I'm asking them last few years and they never reply - telling me I should hire a surveyor for the appraisal - but I just want them to tell me what is their expectation.
    Originally posted by Janzzz
    You cannot force the freeholder to suggest a price for extending a lease.

    You are free to make an offer for extending the lease, which the freeholder is free to accept or reject.

    To decide how much to offer, you can...
    • Pay a surveyor to do a lease extension valuation
    • Get an idea from the online calculators
    • Pick a number out of the air
    etc

    Here are a couple of examples of lease extension calculators:

    https://www.lease-advice.org/calculator/
    http://www.myleasehold.co.uk/lease-extension-calculator

    Ideally, you should insist on zero ground rent.

    If the freeholder isn't interested in discussing this with you, you can force them to give you a lease extension using the statutory process
    See: https://www.lease-advice.org/advice-guide/lease-extension-getting-started/
    • Janzzz
    • By Janzzz 24th Apr 18, 7:38 PM
    • 31 Posts
    • 2 Thanks
    Janzzz
    ...Who currently owns the freehold of the building? (The freehold of the building might be owned by one or more of the other leaseholders.)
    Originally posted by eddddy
    Thank you very much for your kind reply dear @eddddy
    The freehold is owned by the ltd company run by the freeholders in the building.
    There are 72 flats in this building and as far as I know, only few of them are in the same situation as we are... all the other residents have part of the freehold / 999 leashold - exactly as you mentioned - they own the freehold of a whole building.

    + I have just found out that the freeholders company refused the offer for extension by other leasholder and they force them to use their own solicitor who apprised the flat for 600k - which is total nonsense, because same flat just sold for 400k.
    --- so, the other question is, can freeholder force me to use their surveyor?

    Thank you very much again
    Last edited by Janzzz; 24-04-2018 at 8:25 PM. Reason: adding more information
    • Joanthebone
    • By Joanthebone 25th Apr 18, 7:03 AM
    • 246 Posts
    • 757 Thanks
    Joanthebone
    Hi Janzz, when I wanted to extend my lease the freeholder offered me a stupid deal which included a new ground rent that doubled every 10 years!! So then I used a specialist leasehold surveyor, who negotiated for me and got me a very good deal, I increased my 65 year lease to 165 years, with no ground rent. The surveyor charged me a fixed fee and this would have included representing me at a tribunal if it had become necessary. There were solicitor charges and you will have to pay the freeholders expenses too, but get some specialist help is my advice. You must have your own surveyor, mine did all the work and it was a great weight off my mind! I know that sounds harsh but you will either not be able to sell or you will not get a decent price for your property otherwise.
    • Janzzz
    • By Janzzz 25th Apr 18, 9:38 AM
    • 31 Posts
    • 2 Thanks
    Janzzz
    ....
    Originally posted by Joanthebone
    Thank you very much for your reply Joan. You are totally right.
    The fix fee is a great idea... so, we don't end up paying unexpected cost.
    We are looking at the option to take the case to the Leaseholders tribunal.
    I'm just afraid when people say I would have to pay their expenses too... which is not only unfair, but it scares people like me - with very little money - who can't almost afford even their own lawyers/surveyors. Like someone else in our building who is now selling their flat under market value because they can't afford to pay the fees.
    Thank you
    Have a great day
    • eddddy
    • By eddddy 25th Apr 18, 9:51 AM
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    • 6,357 Thanks
    eddddy
    Thank you very much for your reply Joan. You are totally right.
    The fix fee is a great idea... so, we don't end up paying unexpected cost.
    We are looking at the option to take the case to the Leaseholders tribunal.
    I'm just afraid when people say I would have to pay their expenses too... which is not only unfair, but it scares people like me - with very little money - who can't almost afford even their own lawyers/surveyors. Like someone else in our building who is now selling their flat under market value because they can't afford to pay the fees.
    Originally posted by Janzzz
    Broadly, there are 2 ways of extending a lease

    1. Statutory route
    - as Joanthebone seems to be describing. Fees are high - maybe 3k to 5k. The exact cost of the extension and the exact fees are not predictable

    2. Informal route
    Extension cost can be agreed in advance. Fees should be lower and can be agreed (fixed) in advance.
    But you need to know what you are doing. As Joanthebone says, you could end up with a terrible deal otherwise.


    Given that your neighbours are your freeholders (so maybe less likely to try to rip you off), I would be very tempted to try the informal route first.

    Maybe make them an offer, based on the online calculators (for 90 years added to the lease at zero ground rent) and see what happens.
    • Janzzz
    • By Janzzz 25th Apr 18, 10:45 AM
    • 31 Posts
    • 2 Thanks
    Janzzz
    Broadly, there are 2 ways of extending a lease

    1. Statutory route
    - as Joanthebone seems to be describing. Fees are high - maybe 3k to 5k. The exact cost of the extension and the exact fees are not predictable

    2. Informal route
    Extension cost can be agreed in advance. Fees should be lower and can be agreed (fixed) in advance.
    But you need to know what you are doing. As Joanthebone says, you could end up with a terrible deal otherwise.


    Given that your neighbours are your freeholders (so maybe less likely to try to rip you off), I would be very tempted to try the informal route first.

    Maybe make them an offer, based on the online calculators (for 90 years added to the lease at zero ground rent) and see what happens.
    Originally posted by eddddy
    Thanks so much for all your advice. I think paying the professional would definitely help.
    If they refuse our offer - do I have to pay for their own surveyor appraisal? Because they told us they would accept only their own and we know they the guy is on their site and over valuing the flats in their benefit.
    Thank you
    • eddddy
    • By eddddy 25th Apr 18, 11:58 AM
    • 6,468 Posts
    • 6,357 Thanks
    eddddy
    If they refuse our offer - do I have to pay for their own surveyor appraisal?
    Originally posted by Janzzz
    If it's an informal lease extension - there are no rules whatsoever about what anyone does, or what anyone pays for.

    For example, if the freeholder's are 'baddies' they might ask you to pay a valuation fee of 1k and then come back with a valuation of 100k.

    Because they told us they would accept only their own and we know they the guy is on their site and over valuing the flats in their benefit.
    Originally posted by Janzzz
    The bottom line is... if you can't agree a price that you're happy with informally, you'll have to go down the statutory route.
    • Janzzz
    • By Janzzz 25th Apr 18, 3:37 PM
    • 31 Posts
    • 2 Thanks
    Janzzz
    If it's an informal lease extension - there are no rules whatsoever about what anyone does, or what anyone pays for...
    Originally posted by eddddy
    Thank you, so if I understand well, they can't force me to use their own and pay for it? And if they don't accept our offer... we will have to go to leasholders tribunal (or some other official body).
    Tahnk you
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