Who knows How Many Participants?

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    Who knows How Many Participants?

    Apologies - still waiting for the auction to take place and our solicitor is suggesting that we force a freehold enfranchisement. We have 7 out of 10 potential "forkers out" but are likely to lose 2 of these if the amount required per person exceeds a certain figure. One of the forkers is a company and they are prepared to bankroll an amount relating to the non participants so that no one need pay more than one tenth. They, themselves COULD pay more and were proposing to do so if the 2 flaky forkers chickened out.
    The scenario would then be that the freehold owning company we have set up would have sufficient funds to purchase the freehold, or step into the shoes of the purchaser at auction, but only 5 out of 10 of the flats would be represented.
    Who would know that less than 50% had contributed to the total? And is it a hanging offence?
    Regards to all,
    Cosec5

    #2
    50 % or MORE than 50% participants

    Now getting too panicked to look this up. Getting emails from the solicitor marked Urgent, Very Urgent and Serious which is quite scary and not good for the stress levels.
    We have 7 out of a possible 10 potential participants in the RFR caper. Solicitor says we should stop the property going to auction by exercising our right to collective enfranchisement and making an offer. 2 of the 7 potentials are going to drop out of we offer more than a laughably small amount. I thought we had to have more than 50% (i.e. 6 or more flats) participation, but is it actually 50% (i.e. 5 flats)? If the latter we might be able to make a more reasonable offer by discounting the long pocket/short arm folks.
    Auction catalogue due out today - just dying to see what the guide price is..
    Thanks all,
    CoSec5

    Comment


      #3
      Don't worry . Its not a hanging offence ! even murderers can get away nowadays.

      Have you informed the freeholder's solicitor of the name of your nominee company ( which will purchase the freehold on behalf of the tenants who participate .) ? After the auction at which the highest bid price decides the purchase price, the law requires the freeholder to offer the freehold to the nominee company at same price under the right of first refusal. So long as your group of participants can raise the total amount , your nominated company should proceed with the purchase.

      You should encourage all the tenants to participate in the purchase as afterwards collection of annual ground rent can be stopped and this will increase the value of their property compared to leasehold only. It quite simple for tenants to raise their share of money by adding to their existing mortgage and mortgage lenders are used to such requests.

      Dont forget to write the letter to the auction company pointing out that

      (1) the tenants intend to exercise their right to buy the freehold under RFR

      and

      (2) the building insurance is collected by the Management Company ( a company controlled by the tenants ). This will discourage many ground rent portfolio companies from bidding up the price.

      Comment


        #4
        It may all be academic

        Thanks Tenant 29 for yor reply but it may all be academic now. I have downloaded a Special Conditions Notice which appeared next to our Lot on the auction web site. I've just had a look at it and have seen the following:
        3. ....."On 6 July 2007, the requisite majority of qualifying tenants served a notice pursuant to sention 6(5) of the Landlord and Tenant Act 1987 nominating a nominated person. The qualifying tenants did not serve a notice electing that the provisions of section 8b of the Landlord and tenant Act 1987 shall apply and the nominated person is treated as having served a notice of withdrawal under section 9a of the Landlord and Tenant Act."
        so it looks as if our solicitor has failed us. No wonder he was trying to get us to go down the collective enfranchisement route. Good grief, the number of times I have read on this site about the requirement to serve the notice 28 days before the auction, etc., I would have thought that a solicitor specialising in property matters would have done this as a matter or course. On second thoughts is it our fault that this wasn't done - surely not...? Presumably our only action now is to try the collective enfranchisement thing with the new freeholder - if there is one - after the auction. At least we should know how much it sold for and be able to take a view as to whether was can afford it or not. Not only am I tired, I'm also partly insane and fully fed up. I could scream and I probably will.
        Still, I will send a letter pointing out about the insurance and the Management Company, if you think it might make a difference.
        Thanks, Cosec 5

        Comment


          #5
          1. Yes, do write the letter and send it to auction company. And say that earlier failure to mention provisions under section 8b etc was an error by your solicitor and that the lessee's wish to be offered the "right of first refusal" because the leasehold contract is basically an unfair contract which forfeits the lessee's entire investment.

          Mark the letter c.c. to your local MP and copy to Housing Minister , House of Commons and ask for their intervention - they are elected to serve the best interests of their constituents - not the landlord companies.

          Make sure you keep copies of all letters in case you may need to before the LVT and have some written evidence.


          2. Get your solicitor to write a letter to the freeholder to inform of the error and request the RFR to be included in the procedure. ( you may also consider sueing the solicitor for the mistake and any loss incurred later as solicitor's are insured by the Law Society. ).

          Comment


            #6
            The Final Chapter

            The freehold sold after "hectic bidding" for £122,000 - that's for 10 flats, in Bedfordshire, not in London, with total ground rent of £195.00 pa, 55 years left on the clock, with not more than one person likely to want to move within the next 3 years. Are they mad or what? Even with the RFR in place we would have had to say no thanks. I'm wondering that if there had been the declaration that we had elected to take up our rights, the bidding would have been less hectic and we might have been able to afford the eventual price? Our solicitor seemed to think that we had to keep it quiet otherwise there might have been no bids and we would have lost out. This wasn't quite how we expected the process to go as it seemed pretty straightforward in all the documentation, with no hint of required deviousness.
            I did write to the auction house confirming the existence of the maintenance company and the insurance but did not mention the RFR.
            Thanks for everyone's help and advice over the intervening months. You almost made me feel like an expert - for a while. I have just come out of the corner where I have been weeping, and feel better now. No signs of the new freeholder though.
            I'll be back!
            Jenny (CoSec5)

            Comment


              #7
              Since your leases have 55 years left , the situation is attractive to those companies which want reap the profit from extending the lease and collect the benefit on marriage value on any flat which plans to sell in the near future.

              Join Carl and campaign for the ending of the leasehold system and ending of marriage values.

              Comment


                #8
                Originally posted by tenant29 View Post
                Since your leases have 55 years left , the situation is attractive to those companies which want reap the profit from extending the lease and collect the benefit on marriage value on any flat which plans to sell in the near future.

                Join Carl and campaign for the ending of the leasehold system and ending of marriage values.
                Wrong.
                A 55yr lease is like a car nearing the end of its roadworthy life. It has lost a large proportion of its value by depreciation, in both cases.
                A leasehold purchaser knows this and should price accordingly.
                Do you think that HM Government should legislate to give all car owners free replacements?
                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


                  #9
                  Originally posted by jeffrey View Post
                  Do you think that HM Government should legislate to give all car owners free replacements?
                  Yes!

                  And if they are doing so, then I want a BIG 4X4 !!

                  Comment

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