Opportunity to purchase freehold

[pinky]

Hi, I purchased a leasehold 1st floor maisonette with a garden 3 years ago. There are 4 maisonettes in the block. The lease currently has 62 years left on it and this has always been a concern of mine.

I have recently received a letter from a surveyors on behalf of the freeholder offering the purchase of the freehold for just under £6000 including solicitors fees. The property was purchased for £80,000 and the yearly ground rent is £30.

Firstly I would like to know if this figure is a reasonable sum for the freehold? And secondly I wonder if anyone could offer some advice on if a term of 62 years on the lease would make the flat harder to sell should I decide to do this, say, within the next 2 years. And would the term affect the value of the property.

I have asked the company if there would be a possibility of extending the lease rather than purchasing the freehold but they did not seem keen on this as the freeholder has just inherited the freehold from his father and wants to get his money out now.

Any help appreciated!

[jeffrey]

Hi, I purchased a leasehold 1st floor maisonette with a garden 3 years ago. There are 4 maisonettes in the block. The lease currently has 62 years left on it and this has always been a concern of mine.

I have recently received a letter from a surveyors on behalf of the freeholder offering the purchase of the freehold for just under £6000 including solicitors fees. The property was purchased for £80,000 and the yearly ground rent is £30.

Firstly I would like to know if this figure is a reasonable sum for the freehold? And secondly I wonder if anyone could offer some advice on if a term of 62 years on the lease would make the flat harder to sell should I decide to do this, say, within the next 2 years. And would the term affect the value of the property.

I have asked the company if there would be a possibility of extending the lease rather than purchasing the freehold but they did not seem keen on this as the freeholder has just inherited the freehold from his father and wants to get his money out now.
1. You have an individual right to extend lease (adding 90yrs. to term and reducing ground rent to a peppercorn, i.e. non-money rent).

2. You and other lessees have a collective right to acquire entire buidling's freehold reversion. This must remain intact- never ever sever.

3. As all lessees probably have the same 62yr. problem, option2 is more cost-effective than option1. Reason: only having to pay L's fees once (not four times, one per lease). The lessees can all use one solicitor.

4. Once they have purchased f/r (either in all four names or in name of a new company- limited by guarantee- which they would need to incorporate), they will still need to extend leases. However, the extensions could be much longer than the statutory 90yrs.- e.g. taking terms up to 999 yrs. The lessees' solicitor can deal with all this in-house, minimising costs.

5. Either way, a 62yr. lease is:
a. very hard to sell; and
b. impossible to mortgage.

[pinky]

Thanks for that. Very useful. The letters from the company working on behalf of the freeholder have quoted a price for my individual property which further confuses me if the freehold for the block can only be purchased collectively. I have spoken with the other tennants and only 1 has expressed and interest. 1 flat is empty and has been for years so I cannot speak with them. If there are only 2 out of the 4 peiople interested would this still be possible? I'm assuming the price the freeholder would then double as I would own half the freehold for the four flats rather than a quarter?

[jeffrey]

Thanks for that. Very useful. The letters from the company working on behalf of the freeholder have quoted a price for my individual property which further confuses me if the freehold for the block can only be purchased collectively. I have spoken with the other tennants and only 1 has expressed and interest. 1 flat is empty and has been for years so I cannot speak with them. If there are only 2 out of the 4 peiople interested would this still be possible? I'm assuming the price the freeholder would then double as I would own half the freehold for the four flats rather than a quarter?
Yes, to the last point; but do not allow L to offer bits of f/r to anyone. No matter what, it must stay whole no matter how many (or how few) lessees club-together to buy it.