Golden Oldie

Looking to buy a terraced house but the tenure is leasehold. I have the option to buy the freehold but my solicitor suggested it is a good idea to keep leasehold as if the neighbouring properties are in a state of disrepair, I could get the leaseholder (local borough council) to force the neighbour to carry out repairs...

Has anyone else bought a leasehold and converted it to freehold or had similar issues with a neighbour's house in disrepair?

Thanks, Jon

unclebuck

Walk away.

Golden Oldie

The neighbouring houses are not in disrepair and it would cost less than £100 to buy the leasehold out, which has over 800 years left anyway!

Could you expand on what basis did you advise to walk away please UB?

Shark

Freehold is the only way to fly.

David

Golden Oldie

So am I being advised to buy the leasholder out and turn the property into freehold?

If my neighbours have done this and they then let their homes fall into disrepair affecting my property, what recourse do I have if I can't get the leaseholder to enforce repairs?

dnb

No experience with very long leasehold, but have owned a flat with a 99 year lease (with 70 remaining)

Slightly off the point, but it was difficult to sell at this point, as there wasn't 3 times a normal (25 yr) mortgage length left on the lease.

There's far too much information about leaseholds to post on here conveniently... It's a can of worms really - if you can avoid it, do so!

Read the lease agreement very carefully too, as you could find yourself paying ground rent or managing agents fees, and it's important to know who is responsible for what maintainance and what the procedures are for it.

(Note that in my old lease agreement, I was explicitly forbidden to keep chickens in the communal areas!! )

In my limited experience, the freeholder (whom you will lease the property from) won't do a lot to help you.

[Edited by dnb - 9/22/2003 12:41:38 PM]

Golden Oldie

Thanks dnb

As the leaseholder is the local borough council I would expect them to be slightly more helpful than your average landlord. The council concerned have already told me I will have to pay the whopping sum of £1.42/year so I was prepaired to just pay it, though I hate the idea they could crank it up at any time...

Talking of chickens, my other house is freehold but the title deeds explicitly say no farmyard animals to be kept on the property!!!

dnb

Don't bet on the borough council being helpful. They were my freeholders too, but they denied all knowledge... (They just wanted their £300 per year ground rent. It was fixed in the terms of the lease though, so they couldn't change it.)

Mine was further complicated by a head lease owner too. It was a very strange system. A bit of an "In at the deep end" introduction to property ownership!

Golden Oldie

£300 a year

No wonder UB said to walk away but I assume your are talking about South England whereas I am oop norf

Still, are there any benefits at all to Leasehold? If not, why does it still exist???

unclebuck

That’s free range you’re thinking of, not freehold

Seriously, leasehold is not a good idea. Too many unknowns. You want to be buying a house not a lease. They are far more tricky to sell too. Unless the property is in a mega prime location (i.e. very desirable) I would not go near it. It’s your call though..

UB

Golden Oldie

I'm looking at a 2 bedroom terrace with a garage for £43k so I'll think I will buy the lease out for the extra £100...subject to the survey that's getting done tomorrow

dnb

It was in Earls Court (Central London).

The advantage I see is that in a block of flats, one party remains in overall charge of the building maintainance, so that the building remains in uniform good health. After all, there will be communal parts such as stairs/lifts etc that need to be maintained.

The trouble is that property management companies just see this as an opportunity to send the residents large bills every year for doing sod all.

scoob_babe

oh yes, I second that dnb with regards to management companies and large hikes. The other problem with leasehold in flats is that you are held to ransom by other residents not wanting to pay £x to do things up which can be a pain when you want to have it done as you're selling it!

dnb

In the case of one or two awkward residents, you should be able to nag the management company to do the work using money from the sinking fund (if you have one ) and then get them to take legal action to recover the money from the other residents.

Trouble is that the management co. puts their legal fees on next years service charge! You can't win with them

Diesel

Buy the lease. You will then just be in the same position as us freeholders...

There are actually clauses in my freehold by the builder in 1926 - no business allowed in the street etc.

Make the purchase subject to purchase of freehold.

Took me 12 months to buy a share of the freehold on my flat - be VERY cautious if it is not a self contained building. In fact walk away as the leasejolder/managing agent can fleece you.

D