Enfranchisement of house- L seeks 39,000% g/rent increase

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    Enfranchisement of house- L seeks 39,000% g/rent increase

    I wonder if any of you could offer some advice on a tricky situation my Father finds himself in.

    About five years before her recent death my Grandmother was offered the freehold to the land her house stands on for about 6000 pounds. She didn't take the offer, based on advice from her solicitor that the annual ground rent would not increase 'much' above the 4 pounds per year she had being paying previously. Shortly afterwards, the ground rent increased to 30 pounds per week, which is 1560 pounds per year. My Father tried to help her before she died by taking the case to a tribunal, twice, but the freeholder's solicitors won the fight both times, due in my opinion to the ill-preparedness of my father. To make matters worse, It turns out the new lease is only for 25 years, meaning the house is difficult to sell on the open market. My father is the new owner of the house, he cannot afford the ground rent of 30 pounds per week, and he cannot sell the house for a reasonable price.

    I have a few specific questions and apart from that I would really welcome any comments from anybody who can comment on the legality of the situation I have described.

    1. Is there any obvious reason why a lease extension with peppercorn rent was not applied upon the expiration of the original lease?
    2. The landlord’s representatives are asking for around 80’000 pounds for my father’s interest in the land, is that fair? I heard that the cost of buying the land should be around 20 times the annual ground rent.

    Any comment would be appreciated. This appears to be a particularly unfair situation. This is a 3 bedroomed victorian terraced house in poor to average condition.

    #2
    1. You should see your local MP and discuss your problem to see if he/she can raise your problem with the Housing Minister . There may be a way to deal with unfair increases in ground rent.

    2. If you still have the letter giving wrong advice from the "solicitor" to your grandmother, you could consider sueing that solicitor. I don't understand why the solicitor gave such adviced when the original lease was very near to the expiry date and did not recommend applying for lease extension. Has the freeholder company changed during the past years ?.

    3. You could sign the e-petition for abolishing leaseholds, which you can find in another thread in this section.

    Comment


      #3
      Originally posted by adarrell View Post
      I wonder if any of you could offer some advice on a tricky situation my Father finds himself in.

      About five years before her recent death my Grandmother was offered the freehold to the land her house stands on for about 6000 pounds. She didn't take the offer, based on advice from her solicitor that the annual ground rent would not increase 'much' above the 4 pounds per year she had being paying previously. Shortly afterwards, the ground rent increased to 30 pounds per week, which is 1560 pounds per year. My Father tried to help her before she died by taking the case to a tribunal, twice, but the freeholder's solicitors won the fight both times, due in my opinion to the ill-preparedness of my father. To make matters worse, It turns out the new lease is only for 25 years, meaning the house is difficult to sell on the open market. My father is the new owner of the house, he cannot afford the ground rent of 30 pounds per week, and he cannot sell the house for a reasonable price.

      I have a few specific questions and apart from that I would really welcome any comments from anybody who can comment on the legality of the situation I have described.

      1. Is there any obvious reason why a lease extension with peppercorn rent was not applied upon the expiration of the original lease?
      2. The landlord’s representatives are asking for around 80’000 pounds for my father’s interest in the land, is that fair? I heard that the cost of buying the land should be around 20 times the annual ground rent.

      Any comment would be appreciated. This appears to be a particularly unfair situation. This is a 3 bedroomed victorian terraced house in poor to average condition.
      Making practical suggestions rather than hobby-horsing (tenant29), I analyse the position like this:
      1. No. Did your grandmother have a long lease which actually expired? If so, and unless she claimed her statutory rights, L was not obliged to grant her anything. She could remain resident, true, but only as a weekly tenant (hence the £30 per week rent- not really a ground rent).
      2. In the circumstances, the £80 000 quotation is (I think) for the freehold ownership and not referrable to a lease.
      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


        #4
        Thank you both for your replies.

        The freeholder is a private individual, I believe that ownership of the land actually changed at the end of the previous lease.

        I don't know the length of the previous lease unfortunately. However, the previous lease definitely expired. Assuming a long lease, does the failure of my grandmother's solicitor to suggest she claim her statutory right to a lease extension at a peppercorn rent constitute malpractice in your opinion Jeffrey?

        You're right, the £80 000 quotation is for the freehold ownership and not referrable to a lease. However, that figure does seem awfully high, considering houses in that street only tend to sell for about £200 000 freehold. Is the land really worth that much, even including half of the marriage value?

        Many thanks

        Comment


          #5
          For a house, a lessee of >2yrs standing has a statutory right to buy the freehold reversion or a 50-yr lease extension. Originally, the rule required 5yrs ownership AND owner-occupation; the 5 became 3; then became 2 (and, at the same time, the o-o requirement was repealed). Perhaps the lease expiry was during the "5yr" or "3yr" period and the lessee was not the o-o so had no legal right at all.
          Forget marriage value. The deal now seems to be a £200 000 house (subject to a weekly tenancy) for only £80 000. So- yes, it's certainly worth it!
          Finally, I would need much more information to adjudge whether there was malpractice. Send me a pm with your contact details if you want me to dig deeper.
          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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