Landlord has served a section 5, 5A

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    Landlord has served a section 5, 5A

    Hi All,
    My first post on here , so I'll try to keep it short and to the point .
    I am hoping for some advice from you knowledgable people .
    I am the owner of 2 purpose built flats in a block of 4 flats.2 flats up and 2 down.
    Each flat has its own entrance, garden and drive-so- no common use areas. The other 2 owners of the other 2 flats have bought them-and reside in them.There is 960 years remaining on the lease at £25 per month.
    I let my flats out on a sht.
    I purchased my first flat in the block in 1998 and second in 2001.
    Each flat is worth approx 90k.
    Last week we received a letter from freeholders (Barratts manchester) solicitor- giving us right of first refusal. Section 5. Price stated is Deposit £140 and Consideration £1400.
    The other 2 tenants are not interested in buying the freehold at the moment and is doubtful they will change their minds .
    Because I only own 50% of the 4 leases in the building-it appears I fall short of being a majority-so cannot do it.
    I also feel the price stated is not worth it from a investment point of view -that's if I could buy the lease.
    My dilema is- in 1998 when I first let out the first flat- a certain unsavoury management company (who are quite famous on here) bombarded me with lots of demands for payments- for the usual stuff -and I had to pay. They said they were the freeholders of the property- and continued to charge me .
    It was a very stressful time . After maybe 15 months of this- I started digging Land Reg etc - and it turned out Barratts were the freeholders-ebven though barratts has sold nearby buildings to 'them'.
    It was then a struggle to get my money back from management company/fake freeholders.
    The point I am trying to make is- if I did not (providing I could) purchase the freehold- and it was 'sold on' -- it could possibly end up in the hands of such sharks again- and as I now have 2 flats in the building it will be twice as bad.
    Would you think that such a company would be interested in the building which does not provide much in the way of income ?.
    Sorry this is a bit long .
    Regards, Pete

    #2
    Presumably there is nothing to stop you buying the freehold yourself and becoming the other lessees' freeholder is there?

    I think it might be worthwhile to you in the long term, as you will then be able to maintain the outside when necessary.

    This may enhance the letting value of your flats, and I certainly wouldn't want to let 'Smirca' get hold of them!

    Comment


      #3
      You want to buy this to controle this thats for sure just bget a copy of the frrhold and be sure the lessors covenents are something you nare comfortable with.

      Comment


        #4
        I agree with JKO, surely in a situation like this, where the freehold has been offered, you could buy it individually or as a group should you so wish.

        This is where it differs from RTE where it can only be purchased as a group (an RTE company), this is where the 50% rule comes in.

        If I'm wrong in this belief then I'm sure someone will add to this.

        Andy
        Advice given is based on my experience representing myself as a leaseholder both in the County Court and at Leasehold Valuation Tribunals.

        I do not accept any liability to you in relation to the advice given.

        It is always recommended you seek further advice from a solicitor or legal expert.

        Always read your lease first, it is the legally binding contract between leaseholder and freeholder.

        Comment


          #5
          In these cases the freeholder normally has a buyer in place to purchase, and very often exchanges and completes within days of the expiry of the notice.

          I would suggest that the OP contacts the owners and as suggested buy the freehold BUT this must be as the "groups" nominated purchaser.

          It might encourage others if the OP gives a great deal of thought about who, and how the building will be managed after he buys.

          I would suggest that if there is a concern or reluctance, he might suggest that they agree that he buy and then accept an application of right to manage by himself ( as a leaseholder) and the others, so that he has ownership but as a group, they are responsible for management.

          The op would be a member and exercise control as the group agree, and if they cant be bothered he runs the show anyway.

          That is better than an external freeholder and their tame agent who may or not be a "good" one.
          Based on the information posted, I offer my thoughts.Any action you then take is your liability. While commending individual effort, there is no substitute for a thorough review of documents and facts by paid for professional advisers.

          Comment


            #6
            Thank you for replies

            It's interesting to hear 'In these cases the freeholder already has a buyer lined up' .
            I was wondering about that.
            3/ on the offer it says 'The landlord intends to enter into a contract to sell the Freehold interest of the building '.
            I didn't know if that was a standard term' though.

            Regarding maintaining the building- everyone looks after their own flat- inside and out .
            Never ever has anything been taken care of by the freeholder.
            Regarding me alone buying the freehold- I really do feel it's too expensive when things are added in (legal fees etc) it could be £2k maybe more . Also- it seems a bit unfair that I have to pay to keep the 'wolf' from everyones door .
            I also only intend to keep the flats for another 5 years .
            I appreciate your replies and help
            Thanks

            Comment


              #7
              Whoops !! apologies -- I made a mistake in my first post.
              The ground rent for my flats is £25 per year and NOT per month .
              Does this throw a different slant on things ?.
              Regards,
              Pete

              Comment


                #8
                Thanks JKO-- but- is it possible for me to buy the freehold outright ? seeing as I only have 50% (and not 51%) before the 2 month expiry date of the offer .
                Regards,
                Pete

                ps- I do hope someone can enlighten me- it's driving me crazy thinking I may be snared again by a bunch of heartless money grabbing 'so and sos'.
                The money I'd pay- is purely for the peace of mind - the freehold title is insignificant.

                Comment


                  #9
                  Originally posted by peter a View Post
                  Thanks JKO-- but- is it possible for me to buy the freehold outright ? seeing as I only have 50% (and not 51%) before the 2 month expiry date of the offer .
                  Regards,
                  Pete
                  Possible for you, me or Uncle Tom Cobley I would have thought, but only after the two months are up.

                  Comment


                    #10
                    Originally posted by peter a View Post
                    Thanks JKO-- but- is it possible for me to buy the freehold outright ? seeing as I only have 50% (and not 51%) before the 2 month expiry date of the offer .
                    Regards,
                    Pete

                    ps- I do hope someone can enlighten me- it's driving me crazy thinking I may be snared again by a bunch of heartless money grabbing 'so and sos'.
                    The money I'd pay- is purely for the peace of mind - the freehold title is insignificant.
                    Please refer back to post 5

                    I would suggest that the OP contacts the owners and as suggested buy the freehold BUT this must be as the "groups" nominated purchaser.
                    You cannot exercise first refusal alone as you have explained, the above quote is the only available route, as, as explained it is likely that Barrett have a buyer lined up. You , to them , are an unknown quantity as a buyer.If you negotiated a sale at a higher price then they would have to serve a new section 5 at the higher price.

                    The leaseholders exercise the right of first refusal and nominate you as the purchaser. That way you buy it "outright", they take no further part in ownership and management.
                    Based on the information posted, I offer my thoughts.Any action you then take is your liability. While commending individual effort, there is no substitute for a thorough review of documents and facts by paid for professional advisers.

                    Comment


                      #11
                      Originally posted by leaseholdanswers View Post
                      Please refer back to post 5



                      You cannot exercise first refusal alone as you have explained, the above quote is the only available route, as, as explained it is likely that Barrett have a buyer lined up. You , to them , are an unknown quantity as a buyer.If you negotiated a sale at a higher price then they would have to serve a new section 5 at the higher price.

                      The leaseholders exercise the right of first refusal and nominate you as the purchaser. That way you buy it "outright", they take no further part in ownership and management.
                      Thank you again LH Answers,
                      I think that is the route I will have to take .
                      Just a question though . On the offer to sell- there was no mention of the sellers legal costs . Would they also be down to me ?.
                      Thanks again
                      Regards, Pete

                      Comment


                        #12
                        Originally posted by peter a View Post
                        Thank you again LH Answers,
                        I think that is the route I will have to take .
                        Just a question though . On the offer to sell- there was no mention of the sellers legal costs . Would they also be down to me ?.
                        Thanks again
                        Regards, Pete
                        Yes they normally are asked for- refuse.
                        Based on the information posted, I offer my thoughts.Any action you then take is your liability. While commending individual effort, there is no substitute for a thorough review of documents and facts by paid for professional advisers.

                        Comment


                          #13
                          Originally posted by leaseholdanswers View Post
                          Yes they normally are asked for- refuse.
                          Just refuse ? What usually follows that ?.

                          Comment


                            #14
                            Originally posted by peter a View Post
                            Just refuse ? What usually follows that ?.
                            You argue; there is no basis that you should pay them however some try it on.
                            Based on the information posted, I offer my thoughts.Any action you then take is your liability. While commending individual effort, there is no substitute for a thorough review of documents and facts by paid for professional advisers.

                            Comment


                              #15
                              Originally posted by leaseholdanswers View Post
                              You argue; there is no basis that you should pay them however some try it on.
                              Sounds like common sense to me to do that -- thank you for advice --it REALLY is much appreciated.

                              I dont like to be a pain I T A --but a development today is- that one of the other tenants is now interested in a 'piece of the action'.
                              So- that makes me with my 2 flats and 'them' with one flat and other tenant with one flat is not interested.
                              If I decide to go with the 'willing tenant'-- what proportion should the cost of buying the freehold should be apportioned to me ?? two thirds or half of purchase price ?.
                              Regards, Pete

                              Comment

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