Enfranchising on house- 999yr term- cost?

[bandit]

hi there, can anybody advise me on roughly how much i should be paying to purchase the ground rent freehold for my house? its in england on a 999 year lease from 1959, ground rent is fixed at £14.00 per anum? the management company that collect the ground rent have offered it me for £1090.00, this is to include their legal fees and the £40.00 land reg fee, this seems a lot, as they will do the legal work in house so it represents about 75 years of ground rents in one lump sum? seems like a good deal for them but not for me? i know they bought a whole block of these freeholds about 4 years ago! ..... any help greatly appreciated.

[jeffrey]

hi there, can anybody advise me on roughly how much i should be paying to purchase the ground rent freehold for my house? its in england on a 999 year lease from 1959, ground rent is fixed at £14.00 per anum? the management company that collect the ground rent have offered it me for £1090.00, this is to include their legal fees and the £40.00 land reg fee, this seems a lot, as they will do the legal work in house so it represents about 75 years of ground rents in one lump sum? seems like a good deal for them but not for me? i know they bought a whole block of these freeholds about 4 years ago! ..... any help greatly appreciated.

1. For a long leashold house, I usually recommend 20 to 25 years times ground rent. Any more is expensive; any less is very good.
2. So a fair price would be £280 to £350.
3. You have to pay V's legal fees too. These should rarely be more than £250 + VAT.
4. So total should be £575 to £645.
5. If the £1090 includes purchase legal fees (say £280 + £49 VAT + £40 LR fee = £369), that increases total to £945 to £1015.
6. The £1090 is therefore not too unreasonable in the circumstances, although you might try to make a reduced offer or to ask how much it would be if you used your own solicitor.
7. If V's solicitor will be acting for you as well, make it confirm IN WRITING that it recognises you as a client and therefore owes you the normal duties which a solicitor owes to a client.

[bandit]

hi, thanks for the reply, the offer to purchase the freehold letter states that the £1090 includes their 'administrative fees' presumably this means their legal fees,also it includes the £40 land reg' fee but not my legal fees! it states that this is a simple freehold transfer process, so would i need a solicitor for this procedure, is it not just a fairly straight forward 'transfer of title' if so their costs would be minimal wouldnt they? thanks in anticipation.

[jeffrey]

hi, thanks for the reply, the offer to purchase the freehold letter states that the £1090 includes their 'administrative fees' presumably this means their legal fees,also it includes the £40 land reg' fee but not my legal fees! it states that this is a simple freehold transfer process, so would i need a solicitor for this procedure, is it not just a fairly straight forward 'transfer of title' if so their costs would be minimal wouldnt they? thanks in anticipation.

The offer is inconsistent. LR fees are a disbursement on purchase, so why does the total include the £40 if it excludes purchase conveyancing work?

It might be straightforward, or it might not. Only by using a solicitor (theirs or yours) can you ensure that you acquire a valid title- see some of the horror stories elsewhere on these forums!

[bandit]

hi again, i presume they are trying to make the offer look as good as possible by saying that all expenses are covered in the price, it also suggests that it would take 2-3 months to complete, presumably i would then recieve an official copy of the register from land reg showing me as the proprietor of the land as i have for the building under a seperate LA number, is this not the case? what pitfalls can there be? .....thanks

[jeffrey]

hi again, i presume they are trying to make the offer look as good as possible by saying that all expenses are covered in the price, it also suggests that it would take 2-3 months to complete, presumably i would then recieve an official copy of the register from land reg showing me as the proprietor of the land as i have for the building under a seperate LA number, is this not the case? what pitfalls can there be? .....thanks

If price includes "all expenses", it must surely include the conveyancing work on purchase. Ensure that V has solicitors who owe you a client duty of care; beware if V does its conveyancing work in-house!

There is no need to take 2-3 months. The work can easily be concluded within one month.

Once you complete/register, HMLR will issue a Title Information Document to you. It should show your newly-acquired f/r, registered in your name.

The title number will be the same as for existing f/r title IF this relates to your house only; otherwise the Transfer of Part will lead to a new title number.