Enfranchising- house (lease 983 yrs unexpired, £6 rent)

[annie123]

Hi,
My husband and I own our house outright but we are interested in purchasing the freehold reversion. I've tried to work out how much this might be valued at before I contact the solicitor which collects our annual ground rent of £6. We bought the house in 1996 with 999 year lease.
I last asked about buying the freehold 2 years ago and was quoted £1,950 including legal fees in June 07 which I thought too much. What would be reasonable to offer now? And do I definitely need a solicitor or can I leave it to the company acting for the owner of the land?
Thanks for any advice.
Annie123

[jeffrey]

My husband and I own our house outright but we are interested in purchasing the freehold reversion. I've tried to work out how much this might be valued at before I contact the solicitor which collects our annual ground rent of £6. We bought the house in 1996 with 999 year lease.
I last asked about buying the freehold 2 years ago and was quoted £1,950 including legal fees in June 07 which I thought too much. What would be reasonable to offer now? And do I definitely need a solicitor or can I leave it to the company acting for the owner of the land?
Thanks for any advice.
Annie123
1. You have a legal right to buy the f/r: Leasehold Reform Act 1967.
2. The value canot conceivably be more than £100-£150: certainly nothing like the bonkers figure of £1950 (even inc. fees)!
3. As L is disposed to be difficult, I strongly recommend that you:
a. steer clear of any personal contact with its solicitors;
b. instruct as your own solicitor someone competent in leasehold matters;
c. arrange service of a statutory Notice of Claim; and
d. be formal in all dealings with L.
4. If L is a company, can you divulge its name? One or two of such companies are regular LZ topics, due to their notoriety.

[Poppy]

I don't recommend that you give out the freeholder's name.

Some companies disclosed on the internet for various reasons are:

Chancery Lane Estates
Cherrybase Properties Ltd
Compton Developments
Freehold Managers PLC
Freehold Portfolios GR Ltd
Grace Favour Ltd
Ladybrook Securities
Leafenvoy Ltd
Simarc
Urban Point Property Management

Have the property professionally valued for enfranchisement purposes. Employ a solicitor to act solely on your behalf.

[kikuyu]

I don't recommend that you give out the freeholder's name.

Some companies disclosed on the internet for various reasons are:

Chancery Lane Estates
Cherrybase Properties Ltd
Compton Developments
Freehold Managers PLC
Freehold Portfolios GR Ltd
Grace Favour Ltd
Ladybrook Securities
Leafenvoy Ltd
Simarc
Urban Point Property Management

Have the property professionally valued for enfranchisement purposes. Employ a solicitor to act solely on your behalf.

Since all the above companies have been named on this forum, what is the harm of adding a few more?

[jeffrey]

I don't recommend that you give out the freeholder's name.
Whyever not? Kikuyu is right; just stating its name is innocuous.

Have the property professionally valued for enfranchisement purposes.
No, that's a waste of money at this stage.

[Poppy]

Although annie123 thinks £1,950 is too much for the freehold, it may be a simple case that the freeholder does not know the value and is not particularly trying to scam anyone. No need to associate this freeholder with the notorious ones unnecessarily - tell me if I'm wrong annie123.

The £1,950 figure should be regarded as a (high) starting point for negotiation.

[WakeyWakey]

Annie123,

If it helps with you in breaking down the June 07 offer, here is the most "landlord friendly" value of the freehold that I can see: -

£6.00 for 986 years @ 7%
6.00 x 14.2857 = £86

£500,000 deferred for 986 years @ 5%
£500,000 x 0 = £0

Total freehold value £86

Their valuation costs might be £500 + VAT. Their legal fees might be similar. It is therefore possible that you might save several hundred pounds by negotiating.

Why not ask them for their breakdown of freehold, legal and valuation fees?

[jeffrey]

But why should L really need a valuation at all?

[WakeyWakey]

I think L is entitled to the refund of his reasonable costs but take the point that valuing such a small amount of premium does not warrant charges of 5+ times that premium. So no, I would think that neither side would need a valuation in this instance.

[jeffrey]

Their valuation costs might be £500 + VAT. Their legal fees might be similar.
Fees of that level do sound rather high.

[WakeyWakey]

LVT Decision 645 (BIR/00CS/OAF/2008/0491) under the Leasehold Reform Act 1967 determined as follows: -

"viii. Both parties agreed that surveyors costs were not recoverable in this case."

&

"The Tribunal finds that the conveyancing concerns registered land. The fees would be less than a standard conveyance because there is no contract to prepare. The leaseholders' solicitors would not have answer any questions relating to the house as this knowledge the lessee already has. It is noted that the work will be done in house. The Tribunal determines reasonable legal costs would be £350 (plus VAT and disbursements)."

The costs for enfranchising a house are less than for a leasehold flat, as you suggest.

[Gordon999]

Rather confusing Tribunal judgement.

It should read " The freeholder's solicitor would not have to answer any questions relating to the house....."

Presumably the TR1 form is prepared by Lessee solicitor so freeholder solicitor just checks names on form are correct and gets it signed . Not much work!
Does it justify a cost 350 + VAT ?

[jeffrey]

Rather confusing Tribunal judgment.

It should read " The freeholder's solicitor would not have to answer any questions relating to the house....."

Presumably the TR1 form is prepared by Lessee solicitor so freeholder solicitor just checks names on form are correct and gets it signed . Not much work!
Does it justify a cost 350 + VAT ?
It might, even for registered land, because- despite your post- the Transfer could be a TP1 (Transfer of Part of registered title).
This would possibly need:
a. new easements to be granted/reserved;
b. new declaration re boundary line defining transferred part from retained part; and
c. continuation of existing easements/declaration, if sufficiently present in the leases.

[annie123]

Thanks for all your advice. I don't know who is the owner of the land so cannot say if its a company or private. It seems best to seek my own legal advice as clearly the amount quoted 2 years ago is way off the mark!
Annie 123

[Gordon999]

The name of the freeholder is shown on the ground rent demand and can be checked by purchase of a copy of the freehold title for 3 pounds from Land Registry online.

Are you located up North ? Check out www.rpts.gov.uk and go to "Decisions" and select Northern office + house enfranchisement.

[LordC]

Interesting thread

I'm considering buying mine, we were quoted c£2k when we purchased the house.
Our conveyancer recommended that there was no need to buy, however when we found out our freeholder was Leafenvoy we now want to buy it.

This site seems helpful
http://www.lease-advice.org/wizard/?step=7
however, I am quite simply frightened that if I send a letter asking to buy it, not only will I get a stupid valuation but will be charged a stupid amount for the privalige of asking.
I know this could be argued against at the small claims court but let's be honest, that is a drag
I suspect most people will feel the same.

The advice given in the second post (sorry still figuing out quote) was good and I think I will follow this when I've owned the houe for 2 years but for the simple piece of mind that I, not Leafenvoy, own the freehold I may be prepared to pay a bit more than it is worth

[Gordon999]

LordC

Have you checked the rpts website and found a recent LVT judgement price for a house similar to yours in ground rent level and lease period ?

[sgclacy]

But why should L really need a valuation at all?

In a reasonable world no, but as you know that is the law.

It might be possible that there may be development value that needs to be considered.

Assuming this is not the case it might be worth approaching the freeholder and stating that unless there is development potential its value is around £86 if you dont waste my money on a survey I will pay you £400 (or whatever) so we both win

[jeffrey]

Development value is irrelevant as such. Valuation is in respect of:
a. the house and land as at present;
b. the leasehold term, whether long or short; and
c. the ground rent, whether high or low.

The valuation assumptions are set-out in s.9(1) of the Leasehold Reform Act 1967. No reference to development value appears there.