Purchasing Flat with 79yr Lease

[Snickers]

The Flat of 2 I am purchasing has 79years left on the lease.

The landlord was absent for a number of years but I have located him in Australia.

I know the flat above is rented but I dont know if the owner would want to buy the freehold.

The ground rent is £50 till 2012 and £100 for 30 years after.

How much would a lease extenstion roughly cost or/and how much compared to buying the freehold.

[Poppy]

Between yourself and the landlord you must negotiate what it is worth to extend the lease for a minimum of 90 years.

I recommend that you visit the Leasehold Advisory Service (http://www.lease-advice.org) website and learn about your rights and your freeholder's rights.

Is the freehold for sale?

[Snickers]

I am not 100% sure.

the Landlord moved to Austrialia and hasn't been in touch regarding the property for over 12 years.

He was regarded absent, however through a bit of detective work, managed to locate him. although have not spoke to him yet.

I am not sure if that is a sign he would be willing to sell.

However, the property, has not been externally maintained by leaseholders, which is in violation of lease. Im not sure if this will matter at all?

[Poppy]

Please share with the members what are your reasons for buying this flat.

[Snickers]

The flat will be leased out, after redecoration work completed.

I am also hoping the top flat becomes available, as currently being leased, similair to ground floor flat, which will increase value of obtaining the freehold.

[Snickers]

The location is also ideal for renting, only 100 yards from popular market town centre in hertfordshire.

and as a long term investment, could prove a real winner if the work is done correctly, even though will cost quite a bit at first

[Poppy]

What work? How will you make the other leaseholder agree to and pay for this work? You're not the freeholder.

You ask if it will matter. Well, if the roof was damaged and your tenants were unable to live in your property you would be responsible for re-housing them (at the very least).

Why would you want to buy a flat that has an absent freeholder, had no maintenance carried out on it, no one insuring it, other leaseholders not doing anything about the situation? I could go on.

You need to seriously think about what will happen as a result of these undoubted drawbacks.

If you're open to feedback - I personally wouldn't touch it with my bargepole. There will be other deals. Be professional and know when to walk away.

[Snickers]

The landlord has now been tracked down, so is no longer absent.

With the landlord now found, then appying to share costs of the external decoration should be easier to be shared, and forceable due to current tenent not fulfilling lease?

There is a Indemity Insurance supplied for next 23 years with regards to that the vendor believed leaseholder was absent.

The building itself is sound, roof and major brickwork. There are areas that need re-pointing and external decoration has not been maintained, but this can addressed?

the buliding is a converted semi-detached house, with the other side of the sem-detached house well mainatined and not converted

[Worldlife]

Is the freeholder you have found really interested in pushing ahead to ensure leaseholders meet their obligations?

Is the freeholder meeting his/her obligations set out in the leasehold agreement?

Is there a possiblity the freeholder might see opportunities to improve the properties at the expense of the leaseholders?

We changed two flat conversions in one building from freehold to leaseholds with the freehold being owned jointly by the leaseholders

The freehold would attract cash buyers but only a few financial sources were willing to offer a mortgage against a freehold flat.

It is so important to look at the small print in leases and freeholds. For example the leaseholder of the first floor flat thought she had exclusive use of the roof space only to find, on seeking planning consent for a loft conversion ,the roof space had to be available for useage by the ground floor flat for various specific purposes.

If you are organising changes to freehold/leasehold relationships you must be prepared for in depth study of the likely problems and be prepared to check everything. We found the solicitors (nominated by the other leaseholder) had failed to check that Land Registry documentation tied in with the new freehold and leaseholder. We received profuse apologies from the Land Registry for filing the wrong information.

I'm not sure that absentee or a disinterested landlord and another leaseholder unwilling to complete renovations is going to create sufficient financial rewards to justify the input you will need to try and resolve these problems.

Is the apportionment of freehold and leasehold responsibilities a standard agreement in this case or are there any unusual, ambiguous or dubious clauses in the leases?

[tenant29]

The Flat of 2 I am purchasing has 79years left on the lease.

The landlord was absent for a number of years but I have located him in Australia.

I know the flat above is rented but I dont know if the owner would want to buy the freehold.

The ground rent is £50 till 2012 and £100 for 30 years after.

How much would a lease extenstion roughly cost or/and how much compared to buying the freehold.

Flats under 80 years lease term can be extended by a further 90 years lease at peppercorn rent and if we assume the property gains 10% in value after extension to 179 years lease , you should budget to pay about 6% + solicitors costs.

[Snickers]

as the previous owner allowed to go under 80years, should I expect or push for this to be deducted from purchase price?

Working on the 6% rule, the lease is likely to cost around £8500 without any fees

I have spoke to freeholder, and he is very happy to extend the lease.