Absentee landlord- 999 yr lease flat- use RTM/RTE?

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    Absentee landlord- 999 yr lease flat- use RTM/RTE?

    Hi,

    I wonder if anyone can help.

    I have owned a flat for about 6 months which is part of a block of 4 and currently has one of my tenants in it. It is on a balance of a 999 year lease.

    The property is a converted house with 3 self contained flats in the main property (with common hallway) and mine which was built a few years later as an extension on the back with its own access (the actual flat is still joined to main the house)

    The freehold landlord has been absent for over 20 years and there is no property maintenance so each flat owner contributes to any essential repairs as and when needed. The absent landlord holds the freehold to all of them.

    Each flat owner has their own individual buildings insurances.

    One of the flat owners has been trying to sell for about 18 months and of course mortgage lenders always refuse on the prospective buyers.
    They have approached me with the view to setting up a Right To Manage Company for the maintenace to try and help sell their property and have agreed to pay all costs. I have no experience in this area.

    I have also to bear in mind that I might want to sell in the next 5 years and want as smooth a sale as possible.

    Would it be better to try and buy the freehold and also then set up / employ a management company ?

    If we wanted to buy the freehold would it be best to proceed under the 1987 Act and would this qualify?

    Assuming that we can, is it true that the court will usually make an order for costs against the landlord so you can deduct the legal costs from the value of the freehold and pay just the balance of the price (if any) to the court ?
    Since we do not pay any ground rent (I have separate Absentee landlord indemnity insurance that I purchased at the time of purchase) - how can the cost to buy be calculated ?

    Does this usually take a long time to complete (over 12 months) ?

    Due to my lack of experience and concerns about the legal responsibilities that setting up a Right to manage company involves (health and safety matters etc.) is it best to involve a company to manage this for us ?

    Thanks in advance for any help

    Kind regards
    Dave L

    #2
    1. Landlord and Tenant Act 1987 gives lessees a re-active right of first refusal to buy f/r (ie only if L wishes to sell to someone else) or right to extract f/r by Court Order (only if L defaults in complying with his covenants in lease).
    2. So you + other three lessees would be better proceeding under:
    a. Leasehold Reform Housing and Urban Development Act 1993. This gives you (jointly) a pro-active right to buy f/r (Part I, Chapter I); or
    b. Commonhold and Leasehold Reform Act 2002. This gives you (jointly) a Right to Manage (Part 2, Chapter 2).
    3. You need at least half of lessees (ie you + one other) to participate, in both cases.
    4. If L is unknown or untraceable, verify his identity by search at HMLR and copy of registered f/r title (if it is indeed registered).
    5. See s.26 of 1993 Act or s.85 of 2002 Act re where L cannot be found.
    6. Get legal advice from experienced solicitor. Don't try to DIY!
    JEFFREY SHAW, solicitor [and Topic Expert], Nether Edge Law*
    1. Public advice is believed accurate, but I accept no legal responsibility except to direct-paying private clients.
    2. Telephone advice: see http://www.landlordzone.co.uk/forums/showthread.php?t=34638.
    3. For paid advice about conveyancing/leaseholds/L&T, contact me* and become a private client.
    4. *- Contact info: click on my name (blue-highlight link).

    Comment


      #3
      Thanks Jeffrey,

      I will contact the other lessees and have a look at these acts.

      Comment


        #4
        Hi,
        having been through some of the above myself, I cant help but ask how your solicitor allowed you to buy the flat in the first place? After such as short ownership period I wonder if you have any comeback there?

        Comment


          #5
          999yr leasehold is usually OK, even if there are landlord problems (which can be covered by indemnity insurance- I hope that they were).
          JEFFREY SHAW, solicitor [and Topic Expert], Nether Edge Law*
          1. Public advice is believed accurate, but I accept no legal responsibility except to direct-paying private clients.
          2. Telephone advice: see http://www.landlordzone.co.uk/forums/showthread.php?t=34638.
          3. For paid advice about conveyancing/leaseholds/L&T, contact me* and become a private client.
          4. *- Contact info: click on my name (blue-highlight link).

          Comment


            #6
            Hi
            I agree but it just seems to be a consistent thread on these emails, someone buys a flat thinking all is well, then finds they or someone else in the block cant sell sometime later !! If they bought the flat OK then why are the other flat owners having so much difficulty in selling? Different views by acting solicitors?

            Comment


              #7
              I guess that the problem is caused (or exacerbated) by either:
              a. P being in a tearing hurry to complete/move in, not prepared to delay even if the vendor's title or lease is wonky; or
              b. solicitor not doing job thoroughly, because it is handled by:
              i. a "factory" solicitors' firm unable to adjust computer-driven flow chart to suit slight departure from routine; or
              ii. a solicitor who deputes most of casework to unskilled support staff lacking a thorough knowledge of conveyancing; or
              iii. a non-solicitor conveyancer who also does not understand these technical aspects.
              JEFFREY SHAW, solicitor [and Topic Expert], Nether Edge Law*
              1. Public advice is believed accurate, but I accept no legal responsibility except to direct-paying private clients.
              2. Telephone advice: see http://www.landlordzone.co.uk/forums/showthread.php?t=34638.
              3. For paid advice about conveyancing/leaseholds/L&T, contact me* and become a private client.
              4. *- Contact info: click on my name (blue-highlight link).

              Comment

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