Hi everyone,
I am desperate for some advice. I hope someone can help.
I have recently received a letter from the management co. of the freeholder of my property in reply to my request to find a figure for either extending the lease from 53 years back to 99 or the purchase price to collectively buy the freehold.
I am just starting out on this and my letter was my first exploration into this area, so far I have mentioned buying the freehold with the other 3 tenants in our block of 4 maisonettes & everyone is cautiously interested. 3 tenants including myself are on 53 years and the other is on 99 having recently extended their lease.
The Freeholder dismissed my request as out of the question informing me that all of the tenants had to be involved or I would be unable to proceed with purchasing the lease. They also said that setting up a management co. by tenants never works. I have replied that I am sure you are able to proceed as long as you have 50% of the tenants on board & also that I didn't ask for their opinion.
They have told me in turn I am wrong & should consult a solicitor. They are very unhelpful in general. The properties are all covered by buildings insurance which as tenants we are forced to take out with the freeholders own insurers at an inflated price, their role as freeholder seems to rely soley on making money on lease extensions.
They do not maintain the property at all & there are no communal areas to upkeep anyway. Currently the ground rent is a minimal £16 per year but I am told by a neighbour that they have heard this will increase next year to £100 and the year after to £200.
For these reasons I would idealy like to purchase the freehold and set up a management co. with the other tenants but what I would like is to get a rough idea of the costs. How much would it be, would it be significantly more than extending the lease & how does it affect the cost if only 2 or 3 rather than the full 4 tenants were on board?
I have however received back an offer to extend the leasehold back to 99 years.
I am not quite sure how they have broken this down so I am listing below what they have given me in the hope someone can tell me the total cost:
Premium - £15,000
Ground Rent - £200 pa for 33 years, £400 for 33 years & £800 for the last 33 years.
Costs £600 plus disbursements if any plus VAT for legal fees
Plus £250 for Landlords agents Plus VAT.
I do not understand whether that means the ground rent is to be included in the total figure to pe paid up front or not.
Also I bought the property a little under 2 years ago & had a copy of a document from the last owner quoting a figure of £11,000 for the same extension but from 2-3 years ago.
At the time I was able to negotiate a smaller fee for buying the property instead of getting the previous owner to extend the lease.
Now with the property market the way it is I am saddled with this short lease when I could pick up a freehold property without all this hassle for the same price if not less. oh well, bad timing I guess.
What I would like to know though is does this quote seem reasonable, given that property prices are falling & in light of the earlier quoted figure?
Do I have any way of contesting this if it is indeed on the steep side?
I had the house valued as part of switching mortgages 3 months ago (tricky with only 53 years left) and it was quoted as being worth £140,000.
The property is a 2 bed purpose built 1st floor maisonette with garden and garage.
If any one can has any advice or answers I would be really grateful to hear from you.
Thanks
ddodgeman
I am desperate for some advice. I hope someone can help.
I have recently received a letter from the management co. of the freeholder of my property in reply to my request to find a figure for either extending the lease from 53 years back to 99 or the purchase price to collectively buy the freehold.
I am just starting out on this and my letter was my first exploration into this area, so far I have mentioned buying the freehold with the other 3 tenants in our block of 4 maisonettes & everyone is cautiously interested. 3 tenants including myself are on 53 years and the other is on 99 having recently extended their lease.
The Freeholder dismissed my request as out of the question informing me that all of the tenants had to be involved or I would be unable to proceed with purchasing the lease. They also said that setting up a management co. by tenants never works. I have replied that I am sure you are able to proceed as long as you have 50% of the tenants on board & also that I didn't ask for their opinion.
They have told me in turn I am wrong & should consult a solicitor. They are very unhelpful in general. The properties are all covered by buildings insurance which as tenants we are forced to take out with the freeholders own insurers at an inflated price, their role as freeholder seems to rely soley on making money on lease extensions.
They do not maintain the property at all & there are no communal areas to upkeep anyway. Currently the ground rent is a minimal £16 per year but I am told by a neighbour that they have heard this will increase next year to £100 and the year after to £200.
For these reasons I would idealy like to purchase the freehold and set up a management co. with the other tenants but what I would like is to get a rough idea of the costs. How much would it be, would it be significantly more than extending the lease & how does it affect the cost if only 2 or 3 rather than the full 4 tenants were on board?
I have however received back an offer to extend the leasehold back to 99 years.
I am not quite sure how they have broken this down so I am listing below what they have given me in the hope someone can tell me the total cost:
Premium - £15,000
Ground Rent - £200 pa for 33 years, £400 for 33 years & £800 for the last 33 years.
Costs £600 plus disbursements if any plus VAT for legal fees
Plus £250 for Landlords agents Plus VAT.
I do not understand whether that means the ground rent is to be included in the total figure to pe paid up front or not.
Also I bought the property a little under 2 years ago & had a copy of a document from the last owner quoting a figure of £11,000 for the same extension but from 2-3 years ago.
At the time I was able to negotiate a smaller fee for buying the property instead of getting the previous owner to extend the lease.
Now with the property market the way it is I am saddled with this short lease when I could pick up a freehold property without all this hassle for the same price if not less. oh well, bad timing I guess.
What I would like to know though is does this quote seem reasonable, given that property prices are falling & in light of the earlier quoted figure?
Do I have any way of contesting this if it is indeed on the steep side?
I had the house valued as part of switching mortgages 3 months ago (tricky with only 53 years left) and it was quoted as being worth £140,000.
The property is a 2 bed purpose built 1st floor maisonette with garden and garage.
If any one can has any advice or answers I would be really grateful to hear from you.
Thanks
ddodgeman
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