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Purchasing Freehold

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£8 a year using the basic rule of thumb would come to between £120-£240, plus legal fees.

 

Thanks - I guess in this case you would also need to figure in the legal fees for the seller (as well as your own).

 

What if they rejected your offer?

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Once Notice of Claim has been served, the reversioner is compelled to sell.

The only dispute is about at what price; and the First Tier Tribunal can be used but would waste a lot of money on each side.

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Hello, another question about purchasing freehold that I hope Jeffrey Shaw might be able to advise on. We have requested from the surveyors who bill us for our leasehold a quote for purchasing our freehold. There is about 800 years left on the lease. The surveyors have asked us for £350 to prepare the quote, which they say will involve a valuation on the house and going through the deeds. Is this level of fee normal for a quote? Thank you.

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Thats taking the mickey, tell them to FRO.

You shouldn't be paying anything just for a quote, in all honesty it sounds like you shouldn't even be asking to buy it.

 

You employ someone like Jeffrey and he tells them you will be buying it, (after a couple of years when you have the right obviously).

Edited by geared

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"The surveyors have asked us for £350 to prepare the quote, which they say will involve a valuation on the house and going through the deeds. Is this level of fee normal for a quote?"

 

You shouldn't be paying for a quote...

 

We've recently bought our freehold and the costs/process were

 

1. Pay your chosen solicitor to peruse your lease, work out if you can proceed and then issue to notice of claim to the freehold reversioner (the person/company you pay ground rent to although sometimes its not that simple hence the solitictor). As geared says if you've two years owning the lease then they have to sell to you, no ifs no buts, no charging to prepare a quote.

 

2. Their solicitor comes back with a (daft, in our experience) price to buy the freehold + the cost of their legal work. At this stage having issued notice of claim you have to pay the legal costs (but don't have to buy the freehold if you decide against it). This is where any valuation and "going through the deeds" would take place.

 

3. Your solicitor negotiates - you may have to pay for this - i.e. tells them the lease is actually worth £x and if you went to tribunal it'd be a lot more than that for both sides....so....

 

4. You agree a price, somewhere between the two and pay their solicitor the cost of the freehold reversion as agreed + their legal fee.

 

5. You pay your solicitor to prepare and register the new title (i.e. you as the freeholder) and some disbursements such as the land registry fee

 

Most of these costs are either fixed (Land Reg fee) or quoted by your solicitor before instructing them. The only unknown is how much the cheeky beggars who own your freehold are going to open with and how much a lengthy negotiation can cost in solicitors time. If you have a good solicitor they will tell you how much they estimate a tribunal would find the freehold to be worth.

 

I've put this in the lay terms that I understood having gone through the process. THIS IS NOT INDEPENDENT LEGAL ADVICE! It pays to engage a solicitor who specialises in leasehold conveyancing (Jeffrey on here, others are available...)

Edited by iwbsheff

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Some of time the sellers solicitor and/or the seller know how much to expect from a tribunal, so set their figure just slightly under that amount.

So before you start it's always worth considering what the cost of the process would be should it go to tribunal, then budget accordingly.

 

As mentioned before you usually wait 2 years before buying the freehold reversion, which is a decent length of time to put some money away to cover the costs.

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Sorry yes, in relation to geared's point: should have prefaced my story with "once we had lived in the property for 2 years" - you can't begin the notice of claim process until that time (unless your seller transferred it to you as a benefit of the sale, that horse had bolted for us and for you it sounds like)

 

But as geared also points out, it's 2 years to save up.

 

I don't want to throw figures about in public as all cases will be different, but if you PM me I can be more specific. What I can say is it's the legal fees that cost us the money, the actual freehold was pretty cheap - although worth its weight in gold to the people who held it as a means of gouging money out of people. Our freeholder reversions (or who we - and they - thought they were, long story) were a nightmare to deal with during our purchase so we decided it was worth the money to offer the house as freehold when/if we come to sell on.

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"The surveyors have asked us for £350 to prepare the quote, which they say will involve a valuation on the house and going through the deeds. Is this level of fee normal for a quote?"

 

You shouldn't be paying for a quote...

You aren't! Their quote is £350 for the work that you want.

 

You're agreeing to pay the Chartered Surveyor for visiting the property and preparing a professional valuation of the f/r.

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You aren't! Their quote is £350 for the work that you want.

 

You're agreeing to pay the Chartered Surveyor for visiting the property and preparing a professional valuation of the f/r.

 

Hello,Jeffrey. Thanks for responding.

 

We assumed that the chartered surveyors would be able to give us a price based on a calculation done in their office. We didn't realise it would involve a valuation of our property.

 

Whether we buy the lease is rather dependant on what the price is- we haven't a burning need to buy the lease but thought it would nicely tie things up having recently paid off our mortgage.

 

Would it be possible for anyone to give us a ball park figure, or estimate, of what the price to purchase would be? We have 739 years left on the lease, we know the ground rent and the square footage of the land, and using online property websites could guess at the value of the house, to 50k.

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Whether we buy the lease is rather dependant on what the price is- we haven't a burning need to buy the lease but thought it would nicely tie things up having recently paid off our mortgage.

 

Would it be possible for anyone to give us a ball park figure, or estimate, of what the price to purchase would be? We have 739 years left on the lease, we know the ground rent and the square footage of the land, and using online property websites could guess at the value of the house, to 50k.

1. You already own the lease, I think.

2. So what you're considering is purchase of the freehold reversion.

3. For a long lease, a fair price is about 25-30 times the ground rent (assuming that it's fixed for the whole term).

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1. You already own the lease, I think.

2. So what you're considering is purchase of the freehold reversion.

3. For a long lease, a fair price is about 25-30 times the ground rent (assuming that it's fixed for the whole term).

Thank you Jeffrey.

 

That is really helpful, and just the sort of estimate we need.

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I have a leasehold house, it is £4 per year. Every year the freeholders offer a 'price' to buy it. This year it's £850 including 'all costs', which means their solicitors costs and apparently I don't need a solicitor as they will sort everything out.

 

So from what you're saying, worst case, my freehold should be worth around £120, and therefore I'm assuming the rest is 'costs'.

 

I, too, have over 800 years left on the lease, the company who own the freehold are not in any way constricting, nor have a massive list of dos and don'ts. They just collect their £4 each year, which probably costs nearly that much to send the cheque and cash it!

 

So my question is, does £850 seem reasonable, and should I get my own solicitor, or is their offer good?

 

thanks

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