Sale of Freehold. Possible ground rent increase?

[Flanker7 20]

Our previous free holder has recently died and the executors wish to sell the Free Hold.

 

They've given us first option to buy at about £1000 (price + our & their legal costs).

 

Currently we pay £7.50 a year and have about 715 years to go. So it will pay for itself in 133 years.

 

BUT - What if we turn them down and they sell to a third party -

1. Can the new owner then put up the Ground Rent.

2. If they can - How much can they increase the GR by?

3. Is there owt we can do about it?

 

Thanks for any help.

[Copperwood 10]

Personally I would prefer to own the freehold as it should make the property more attractive when you come to sell it on and likely increase the value.

 

There is a government funded website and helpline that provides free advice on leasehold matters and they will be able to answer all your questions properly and professionally.

 

I'm not sure if i'm allowed to post a link but if you google 'Leasehold Advisory Service' you should find it, alternatively you can call them on 020 7832 2500 Monday-Friday.

 

I hope this helps, Matthew.

[heavenlyarts 10]

I'd say it's very much over priced !!

 

my understanding is they cannot increase the price. I've never had trouble selling leasehold property in sheffield.

[Ha3el 10]

i dont think the ground rent is the thing to worry about, it seems to be the maintenance charges where people get done as they can use whoever they want and pass you the bill. you can get right to manage but i think it may require going through court.

 

If you ever plan to sell the house then having the freehold will be worth the £1000 easily i'd think but given the lease is so long maybe haggle a bit? What makes them think someone else would even want to buy it when it would take so long to make back the money.

[H.P 10]

I think 1k isn't that bad if it includes all the legal fee's, we've just completed our freehold reversion and we paid a bit more than that (similar amount of years) we know we paid over the odds, our leasehold guy was a greedy man though and we didn't have time to fight over the price. The legal fee's made up the bulk of the costs. In my mind what we paid amounts to the cost of two consent letters from him for building alterations. That's where buying it pays off, our freehold guy would charge 500 quid for small alterations and anything up to 1000 for larger jobs. It's definitely worth considering

[geared 303]

£1000 sounds about right really, it includes both sides legal fee's correct???

[Flanker7 20]

Thanks.

 

Their solicitors are quoting £295 + VAT + £12 out of pocket expenses (@20% = £367).

I've read that property transactions are VAT exempt - my research isn't getting anywhere but confused at this point. Looking at £1,100 now.

 

Are there any Specialist Solicitors in these types of dealings?

Edited March 2, 2015 by Flanker7

[Cyclone 10]

The transaction might be VAT exempt, but the solicitors charges won't be.

 

---------- Post added 02-03-2015 at 11:39 ----------

 

i dont think the ground rent is the thing to worry about, it seems to be the maintenance charges where people get done as they can use whoever they want and pass you the bill. you can get right to manage but i think it may require going through court.

 

If you ever plan to sell the house then having the freehold will be worth the £1000 easily i'd think but given the lease is so long maybe haggle a bit? What makes them think someone else would even want to buy it when it would take so long to make back the money.

 

I think the maintenance charge thing needs to be written into the lease, Jeffrey can probably confirm that. If it's not, then they can't just start charging for things, and most of the long running leases in Sheffield don't seem to include that kind of clause.

[H.P 10]

Fee's sound about right,our freehold guy used the most expensive solicitors he could find! But he didn't want to sell. We used Taylor &Emmet on Arundel Gate, Mike Haslam did the conveyancing. Very knowledgeable chap and was brilliant at dealing with our difficult freeholder.

Best of luck with it.

[Jeffrey Shaw 90]

Our previous free holder has recently died and the executors wish to sell the Free Hold.

 

They've given us first option to buy at about £1000 (price + our & their legal costs).

 

Currently we pay £7.50 a year and have about 715 years to go. So it will pay for itself in 133 years.

 

BUT - What if we turn them down and they sell to a third party -

1. Can the new owner then put up the Ground Rent.

2. If they can - How much can they increase the GR by?

3. Is there owt we can do about it?

I'll assume that you own a house (not a flat) and that you acquired it over two years ago.

 

The price is far too high. For a long lease and low rent, the price should be about 25-30 times the rent [£185-£225, in your case] + L's legal fees etc. [about £250 + VAT, max.] So your post #7 sounds in line, roughly.

 

If old L's executors sell to new L:

a. you retain your statutory right to enfranchise (= purchase the freehold reversion), under the Leasehold Reform Act 1967;

b. the ground rent cannot be altered unless the existing lease says that it can; and

c. all of your other rights would be unaffected too.

 

---------- Post added 02-03-2015 at 16:49 ----------

 

I think the maintenance charge thing needs to be written into the lease, Jeffrey can probably confirm that. If it's not, then they can't just start charging for things, and most of the long running leases in Sheffield don't seem to include that kind of clause.

Service Charges virtually never apply to houses- only to flats.

Edited March 2, 2015 by Jeffrey Shaw

[Flanker7 20]

The working practices of solicitors?

 

We have now been asked* to pay the sellers costs/fees even if the purchase collapses.

They asked us if we wanted to buy!

 

*Actually, it is more of a condition for the sale to go ahead.

 

The money, obviously, has to be deposited with our solicitors so they can have it in their bank account initially. "Make it £400 just to be going on with".

 

(I recall when we put down the deposit on our first house the £1,000's of pounds went into our solicitors bank account.)

 

I have no idea when any of the bills are paid but I do know that other people have control of my money. And they recieve any interest accrued, not a lot currently but when we first bought it was in excess of 10%)

 

Is this all legal or is it just sharp practice?

Do all solicitors insist on these draconian measures?

 

I don't trust them.

I don't respect the busuness.

I don't want anything to do with them.

They seem to be a necessary evil.

 

(..........rant over, Jeffrey?)

Edited April 27, 2015 by Flanker7
correction

[Cyclone 10]

No need for another reply, didn't realise it was an old thread.