Purchasing Freehold

[Jeffrey Shaw 93]

1. £850 is way too expensive, even if inclusive of V's fees, unless it also includes fees/VAT/HMLR fee on your purchase [see note 4 below].

2. Yes, £120 sounds about right as a purchase price for f/r.

3. No, a property investment company's solicitor may well not be sufficiently impartial.

4. If you do use that solicitor, make certain that he/she establishes a client relationship with you AND that there's no conflict of interest.

[geared 322]

4. If you do use that solicitor, make certain that he/she establishes a client relationship with you AND that there's no conflict of interest.

 

How would a Joe Bloggs type person do that?

 

Do you ask them or something?

[sue white 10]

Hi All

 

I'm in the process of buying a house which was advertised to me as freehold. The solicitor has found out that it's actually leasehold (104 years left on the lease, freeholder is Shef City Council). It's in Walkley/Upperthorpe area and was on the market for £165k.

 

The vendor isn't prepared to go to the council for the valuation to find out the cost of buying the freehold, as this is likely to take 8 weeks. He's offered me £5k reduction on the price.

 

My solicitor has quoted me £2k ish for the council's valuation and solicitor's fees to find out the cost of buying the freehold (which I will legally be allowed to once I've lived there fore two years). Does anyone have any idea whether the £5k seems like a reasonable reduction, or is it likely to come to more than that in total?

 

Thanks

[geared 322]

Double check with someone in the know (Jeffrey) but on the face of it 5K seems pretty decent.

 

From other examples posted people don't seem to be paying anywhere near that to buy the freehold reversion?

Also not entirely sure you need to bother going through the council and paying 2k for a valuation?

 

Surely you wait the required 2 years and then (have a solicitor) file the relevant paperwork in the same way as you would any other leasehold place ???

[sue white 10]

Thanks

 

This is what my solicitor said...

 

'The Councils legal costs will be approx. £400.0 plus vat and they will also charge you for their surveyors fees of £300.00 plus vat (approx.). In addition you will have your own legal costs which would be approx. £500.00. This would all be in addition to the premium that the Council charge for the sale of the Freehold title.'

[geared 322]

You can always get another opinion to check if those figures are correct.

[Jeffrey Shaw 93]

This is what my solicitor said...

 

'The Councils legal costs will be approx. £400.0 plus vat and they will also charge you for their surveyors fees of £300.00 plus vat (approx.). In addition you will have your own legal costs which would be approx. £500.00. This would all be in addition to the premium that the Council charge for the sale of the Freehold title.'

That sounds about right. The f/r's value will inexorably rise as the lease's unexpired term withers away.

 

---------- Post added 14-10-2017 at 23:34 ----------

 

My solicitor has quoted me £2k ish for the council's valuation and solicitor's fees to find out the cost of buying the freehold (which I will legally be allowed to once I've lived there fore two years).

1. No, the £2000 sounds more like the purchase price (approx.)- it's not the cost of finding out.

2. You would not need to live there- merely to own the leasehold- for two years.

3. AND there's a way around that, too, if the vendor will assist by at least serving Notice of Claim before you complete your purchase from him.

[topflat29 10]

When you have a leasehold house paying small ground rent under a 999 years lease, after 2 years from purchase you should offer to buy the freehold title at 16.7 times the annual ground rent plus contribute to £250 + VAT to cover freeholder's conveyancing cost . See link below to recent LVT decision :

 

https://decisions.lease-advice.org//...1-1000/959.pdf

 

When you have a leasehold house under 99 years lease, you should extend before falling below 80 years unexpired term remaining because the compensation formula to pay freeholder includes paying 50% of the marriage value . You can get the free guide from LEASE which is an Advice Centre funded by the Government ( http://www.lease-advice.org }

[Jeffrey Shaw 93]

1. What you term the LVT (Leasehold Valuation Tribunal) is now called the First Tier Tribunal.

2. I do not think that any freehold reversions are likely to be sold at 16.67YP.

3. So trying that will only increase one's own legal fees.

[topflat29 10]

1. Yes , you are right , the previous LVT is now replaced by FTT ( First Tier Tribunal ). Leaseholders can make application to FTT for judgement on the reasonableness of demands in service charges and for determination on price to pay for freehold title etc.

 

2. Some freehold companies operate on the basis that they can make extortionate demands and ramp up the price when leaseholders ask to buy the freehold title of their leasehold house . Recently there was a case of oap reported paying £38K for what should have been around £6K.

 

3. That is why leaseholders need a solicitor like yourself to bring the price down to the proper level around 16.7 YP because the "leasehold game" is now controlled by companies registered in the British Virgin Islands.

 

4. You should be reporting every case to the local MPs around Sheffield and to HMRC for suspected money laundering. One UK company called Prox$ma has been receiving $10+ Mil to $15 Mil in ground rent annually since 2007 but has not paid much company tax due to losses imported from associates companies in BVI

[Jeffrey Shaw 93]

Where the freehold reversioner is based has no relevance to the freehold reversion's value and nor does its taxation status.

[topflat29 10]

If you have a leasehold house , you should be keeping aware of Governments direction to reform the leasehold system by reading the Guardian Newspaper report dated 21 Dec 2017:

 

Leaseholders are to be freed from “feudal practices” in the property market, according to the government minister responsible for housing, with new rules to make extending a lease or purchasing a freehold “much easier, faster and cheaper”.

 

 

Guardian Today: the headlines, the analysis, the debate - sent direct to you

Read more

Sajid Javid, the communities secretary, also said the government would go ahead with a ban on leaseholds on new-build houses first announced in July, and will force developers to cut controversial ground rents to zero for all new apartments and houses.

 

The government will also write to all developers that have sold homes with “onerous ground rent terms” to ask them to provide “necessary redress”. Taylor Woodrow has set aside £130m to assist leasehold buyers but other developers have steadfastly refused to pay any form of compensation.

 

Javid said: “It’s unacceptable for homebuyers to be exploited through unnecessary leaseholds, unjustifiable charges and onerous ground rent terms. It’s clear from the overwhelming response from the public that real action is needed to end these feudal practices.”