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Coppen Estates. . . .Sheffield

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We are going through the legals of purchasing a leasehold property in sheffield

 

The freehold is owned by coppen estates - 160 years left , £30 a yr ground rent

 

We are informed by the vendor that he has not received any bills for the ground rent in the time he has owned it. 

 

In order to add value we would like to purchase the freehold after purchasing the leasehold i.e after completing the purchase. Apparently we would have to own it for 2 yrs? what steps can we take / ask the seller to take to ensure that we will not have to wait the 2 years?

 

does anyone that has done this have any idea of the costs involved ? i.e legal costs/ costs to purchase? and a recommended solicitor that has dealt with them ?

 

thanks

 

 

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The only way to avoid that 2 year delay would be for the current owner to purchase the freehold.  But it's not a quick process, so that would likely delay your purchase.

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17 hours ago, avromo said:

In order to add value we would like to purchase the freehold after purchasing the leasehold i.e after completing the purchase. Apparently we would have to own it for 2 yrs? what steps can we take / ask the seller to take to ensure that we will not have to wait the 2 years?

From what I understand the process is current owner issues the 'notice of claim' (i.e. intention to buy the freehold reversion) then transfers it to you as a 'benefit of the sale'. You can then go through the process of buying the reversion as if you'd already lived there for 2 years. 

 

I'm sure its mentioned on other Coppen threads if you have a look - in theory straightforward but as Cyclone says it may delay proceedings. You've got to have a solicitor (and vendor's solicitor too!) who knows their stuff leasehold-wise which isn't a given in my experience. 

 

Jeffrey Shaw is your man for on the forums. I found him through here and used him to purchase our freehold reversion. Wouldn't hesitate to recommend. 

 

Costs will be specific to your case but the general rule of thumb is 20-25 times your ground rent for the reversion itself then your and Coppen's (reasonable) legal and surveying costs. Mileage will vary based on the complexity of the lease, how long negotiations go on and so on.  Not much point in me guessing. One advantage of the two year thing is you can save up. 

 

As for "We are informed by the vendor that he has not received any bills for the ground rent in the time he has owned it. "

 

Must say this is rather un-Coppen like behaviour....

Edited by iwbsheff

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One reason for Coppen not having billed is possibly that the original lease demised > 1 property and someone else is paying the whole rent .

 

Example:

Lease of 4 houses (call them A/B/C/D), granted by L to T.

T later sells-off house A, to 'AP'.

L will usually continue to collect whole rent from T. T has an equitable right (stipulated in the sale-off deed) to collect 25% from AP.

The same happens when T sells-off house B (to BP) and house C (to CP).

BUT when T sells-off house D (to DP), it all changes.

DP steps-into T's shoes. L will now bill DP for whole rent; DP has T's right to collect-in 25% from each of AP, BP, and CP.

 

None of that affects the Leasehold Reform Act 1967 rights for a two-year tenant (leaseholder) to purchase his/her own house's freehold reversion.

 

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Hi,

 

I am dealing with a similar group operating in the North West area: Compton.

 

The house insurance is due for renewal today (April 1st) and Compton have been in touch over the last fortnight and asked me to move the policy to Zurich Insurance at approximately 2.5x the current annual premium. Last April 1st it was moved to the current insurer at their request as it was a reasonable premium. I would prefer to stay with the current insurer.

 

1. Therefore, is the 'relevant date' within the meaning of the CLRA the renewal date, ie. April 1st 2019 (today)? 

 

2. Does this mean if I submit a correct notice within the next 14 days then I do not have to pay them anything, including a 'consent fee'?

 

3. What would be the approximate cost of asking a solicitor to do this (the notice) for us? I would happily pay the 'consent fee' to someone else if I could rely on it being correct. I have some legal training and know that it isn't easy for a lay person to get a notice correct.

 

4. What is the penalty for not insuring with their preferred insurer? Can they insist we scrap the policy we have taken out and change to Zurich? Can they realistically get the lease to be forfeited? 

 

 

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db6279

 

1. Yes, as I understand it the 'relevant date' is the renewal date.

 

2.  Yes, the notice frees you from any covenant in your lease allowing them to direct your insurer. 

 

3. Probably more than the consent fee. As cyclone says, use the template (same one here as a pdf perhaps a bit easier to copy and paste http://www.legislation.gov.uk/uksi/2004/3097/pdfs/uksi_20043097_en.pdf). I'm not sure if "it isn't easy for a lay person to get a notice correct" but Compton will probably try to tell you that some small procedural error makes it invalid...don't listen to them. Send it recorded post. 

 

4. Unless your lease sets something specific out then no fees are due. Issue the notice and do not pay any spurious 'admin' fees. They cannot compel you to insure with their preferred insurer provided you exercise your rights under Section 164 correctly (point 2 + 3).  As for forfeiting the lease, I'd be surprised but it'll depend on how the lease is written. If it's getting to that point. you'd probably you need qualified legal advice. https://www.lease-advice.org/ provide free advice.  Read back over the Coppen threads on this forum, Jeffrey Shaw has set the process out several times (this is where I discovered it). 

 

Caveat: THIS IS NOT LEGAL ADVICE, just my own experience of using Section 164. if in doubt seek qualified opinion. 

Edited by iwbsheff

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Does anyone (paging Jeffrey Shaw!) know if a lease extension affects the enfranchisement of a house? Eg if a previous owner had extended the lease by 50 years, would the cost of reversion be based on the original term, or the extended term?

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2 hours ago, Bonofido said:

Does anyone (paging Jeffrey Shaw!) know if a lease extension affects the enfranchisement of a house? Eg if a previous owner had extended the lease by 50 years, would the cost of reversion be based on the original term, or the extended term?

The effect of the first lease extension, if it's statutory (= in accordance with the 1967 Act), is this:

1. The term held by T is increased by 50yrs.

2. The ground rent currently payable is unchanged until the old lease's expiry date.

3. But it then rises- and again after 25yrs- to a market rent. This can be hundreds or even thousands of pounds each year- hence an extended house lease might be rejected by a prospective mortgagee (lender) as not being  good and marketable security.

4. The valuation procedures for enfranchisement (= buying the freehold reversion) are similar for those on an unextended lease BUT:

a. of course based on the newly-extended term, treating its expiry as 50yrs further away; and

b. taking account of the statutory market rent increases.

Edited by Jeffrey Shaw

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4 hours ago, Jeffrey Shaw said:

The effect of the first lease extension, if it's statutory (= in accordance with the 1967 Act), is this:

1. The term held by T is increased by 50yrs.

2. The ground rent currently payable is unchanged until the old lease's expiry date.

3. But it then rises- and again after 25yrs- to a market rent. This can be hundreds or even thousands of pounds each year- hence an extended house lease might be rejected by a prospective mortgagee (lender) as not being  good and marketable security.

4. The valuation procedures for enfranchisement (= buying the freehold reversion) are similar for those on an unextended lease BUT:

a. of course based on the newly-extended term, treating its expiry as 50yrs further away; and

b. taking account of the statutory market rent increases.

Ah, so the effect of the lease extension only keeps the ground rent same for the remainder of the original term?

 

So, for buying the freehold reversion, If a house had an extended lease with current unexpired term of 78 years (without extension it would be 28),  would the marriage value be based an 78 years or 28?

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It should be based on 78yrs. MV applies (and T pays 50% of it) unless the unexpired term > 80yrs. Here's s.9(1D) and s.9(1E), with my underlinings:

 

(1D) Where, in determining the price payable for a house and premises in accordance with this section, there falls to be taken into account any marriage value arising by virtue of the coalescence of the freehold and leasehold interests, the share of the marriage value to which the tenant is to be regarded as being entitled shall be one-half of it.

 

(1E) But where at the relevant time the unexpired term of the tenant’s tenancy exceeds eighty years, the marriage value shall be taken to be nil.

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