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Leasehold/ Freehold

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I own a leasehold house in Huddersfield with 897 years remaining of a 999 year lease at a ground rent of just £1 per year. The ground rent is payable to Estates & Management in London (who administer it for the Freeholder). I too am thinking of purchasing the freehold as I want to convert the back garden into a driveway to park my car on, and I've already had the deeds checked by a solicitor for covenants requiring freeholders permission to do alterations - and yes I do require their permission. The ground rent bill comes just before Christmas every year usually accompanied with an invitation to purchase the freehold - last year they quoted £600 all in. I have once tried before to buy the freehold but had my cheque returned stating that the freeholder had shown no interest in selling it (obviously the E+M invite is a standard letter). I know you can now force them in law to sell you the freehold and I was thinking of going down this route if they refused my £600 cheque this time (if indeed that is what they are quoting this time). But now I'm wondering if the £600 "offer" might be too much! I used an online calculator that showed my freehold should only be worth about £17, but on top of that would be legal fees of both sides to pay. Would I save much, especially taking the time and hassle into account?

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I own a leasehold house in Huddersfield with 897 years remaining of a 999 year lease at a ground rent of just £1 per year. The ground rent is payable to Estates & Management in London (who administer it for the Freeholder). I too am thinking of purchasing the freehold as I want to convert the back garden into a driveway to park my car on, and I've already had the deeds checked by a solicitor for covenants requiring freeholders permission to do alterations - and yes I do require their permission. The ground rent bill comes just before Christmas every year usually accompanied with an invitation to purchase the freehold - last year they quoted £600 all in. I have once tried before to buy the freehold but had my cheque returned stating that the freeholder had shown no interest in selling it (obviously the E+M invite is a standard letter). I know you can now force them in law to sell you the freehold and I was thinking of going down this route if they refused my £600 cheque this time (if indeed that is what they are quoting this time). But now I'm wondering if the £600 "offer" might be too much! I used an online calculator that showed my freehold should only be worth about £17, but on top of that would be legal fees of both sides to pay. Would I save much, especially taking the time and hassle into account?

 

I would suggest you need to speak to a solicitor. These things are a mine field. £600 would be cheap if that figure included legal fees of both parties as can sometimes be offered.

After owning the lease for two years you are at liberty to issue notice to the freehold reversioner to buy the freehold. However, it can become very expensive if they were to argue over the price, as it were. You would become liable for both sides legal fees, & if the whole affair was to drag out for 12 months and then to a tribunal it could get very expensive.

 

Also its a bit shady of the management company to offer for sale the freehold reversioners asset without guarentee of it being for sale???

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Yeah 600 quid seems a lot for something worth under £20 but legal fees are definitely not cheap, so probably a good idea to go for it and hope they accept it this time. I'm a tight Yorkshireman but can see I'd not be doing myself any favours going down the legal route, and someone earlier in this thread paid £660 for a freehold worth about £50, so what the hell.

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Yes. Estates and Management Ltd. is, er, not always an easy company with which to deal.

You're best enfranchising [= buying the freehold reversion and any intermediate leasehold reversion]. Of course, the legal fees for such transactions do not depend much on the purchase price- so they'll inevitably sound costly for a transaction at low value such as yours. But £600 for the price + V's fees might still be a good option if only to rid yourself of E&M with its associated companies.

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Thanks chaps for your replies. Just for the benefit of anyone else on here who is thinking about enfranchising - I decided to do a bit of research into the process to see if it would be possible as a diy project - it asks for your rateable value at 2 historic dates - 23rd March 1965 and 31st March 1990 - I emailed Kirklees council to try to get the figures, they gave me the phone number of the Valuation Office - the Valuation Office only have rateable values for Non-Domestic rates so told me to contact the "Archives Dept" back at Kirklees Council - there is no archives dept so can't tell anyone what their last rateable value was (31/3/90 it ended). I discovered that water companies have continued to bill non-metered customers based on their old rateable values, so contacted Yorkshire Water - he suggested I try the Inland Revenue! I am on a water meter now. Fortunately my ex took some old bills with her when she moved out and has found a water bill from 1993 - my rateable value was £97 much to her dismay - hers was £133 for a 2 bedroomed ex council house in Rochdale, mine is 3 bedroomed terrace house in Huddersfield. Hopefully the figure in 1965 won't be needed seeing as the 90 figure is so low.

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Yes. Note that Rateable Values (and Council Tax banding, for that matter) are within the jurisdiction of HMRC's Valuation Office- not the local authority.

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Thanks Jeffrey - I see you are employed in the legal profession. Can I ask you one small question (or 2) - if I do end up going down the legal route I'm a bit concerned about the size of the Freeholder's legal bill - I believe it has to be "reasonable" but what is reasonable? Obviously we all have limited funds - could I end up with a bill for say £2000 or more for something that's worth less than £20?! (Would they inform me about the ongoing cost before it gets too big?) Also, I have read some of the tribunal cases and in some cases the tribunal personal visited the property to get a once over - would they want to be shown round the inside of my house? Sorry if I'm trying to get free information and I know you will want to be cautious in what you say but just a rough idea with no liability whatsoever lol.

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Yes, it can be a problem.

 

You see, a client can challenge his own solicitor's legal fees if they're unreasonable. But statutory enfranchisement and lease extension procedures make a leaseholder (T) liable for the legal/valuation fees of the reversioner (L); yet T has no "client" right to challenge them. And, of course, L won't challenge them -as L's not paying!

 

T's only right of challenge is IF the mater comes before the Leasehold Valuation Tribunal (now called the First-Tier Tribunal) which has jurisdiction to set the price/premium and those fees of L.

 

Valuation: yes, L's valuer wil almost always need internal access to the property for an accurate valuation.

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Mmmm all sounds a bit scary this - would I have to go to court dressed in my best suit as if I'm on a charge?!

 

---------- Post added 24-10-2013 at 19:48 ----------

 

I had an informal discussion on the phone with a local solicitor and one of the things she said was that the freeholder couldn't actually stop me from making alterations to my property (i.e. converting back garden into a driveway to park my car on) but warned me that its when I come to sell my house that I would probably get charged for the lack of their permission. It is highly unlikely that I will want to sell my house in future once I have done the alterations and will probably die in it. I live alone and have no issue to leave my house to so any penalties would have to come out of my estate - I am hoping that E+M send me an invitation to buy the freehold when they send me the ground rent demand just before Christmas (as they have done in previous years) but wondered if they again state they have no interest in selling it to my like last time I tried, I might just be better to go ahead with my alterations without their permission - I suppose they could demand the penalties at any time, if they came round spying on me, but surely the charge would again have to be "reasonable" and possibly a lot less than I'd have to pay if they employed a very expensive solicitor if they were fighting my enfranchisement?

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Either way, having E&M or its associates as your reversioners is bad news; and it never gets better.

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