Selling a flat, freeholder taking the p**s
Discussion
matjk said:
Large company's buy up free holds , they then apoint a management company , they don't look at (in my case) £40'000 free holds and think "ow cool we can buy that for 40k and over the next 100 years we will get back £300 a year!" They buy them to exploit the flaws in the system that allow them to make money other ways! Like commission returned insurance policy's that the leaseholders have to pay! Yes you can have the managment company removed but they will fight tooth and nail to remain . And you have to pay their legal bills along the way 
.
When ours change freeholder, our charges immediately went up 30% in real terms, over night ! Everyone complained and told tough, I googled ours , doesn't make pleasant reading, another dodgy one based in Southend on sea! Why are they all from there
See my point above. There are millions of houses, not flats, or gated communities, just normal houses, that are leasehold. There is no management company and there is no service charge for these properties. The freeholder doesn't sort out the insurance, or the mai tenance or anything at all, other than charging a fee for the lease of the ground that the house sits on aka ground rent . When ours change freeholder, our charges immediately went up 30% in real terms, over night ! Everyone complained and told tough, I googled ours , doesn't make pleasant reading, another dodgy one based in Southend on sea! Why are they all from there
People really need to learn the difference between a leasehold property and a management company, they are two separate entities.
Wait for a new bit of fun.......any building converted pre 1991 where more than two thirds are rented out will now have to apply for an additional HMO licence.....see below
"buildings which have been converted into self contained flats, where the conversion does not meet the standards set by the 1991 Building Regulations, and where less than two thirds of the flats are owner occupied (properties converted into 2 flats or maisonettes will only require a licence if both flats or maisonettes are rented)"
So as a freeholder of flats converted in the 1980s I now have to find out if any of the leaseholders are letting their flats and then pay the council for a licence
"buildings which have been converted into self contained flats, where the conversion does not meet the standards set by the 1991 Building Regulations, and where less than two thirds of the flats are owner occupied (properties converted into 2 flats or maisonettes will only require a licence if both flats or maisonettes are rented)"
So as a freeholder of flats converted in the 1980s I now have to find out if any of the leaseholders are letting their flats and then pay the council for a licence
Rangeroverover said:
Wait for a new bit of fun.......any building converted pre 1991 where more than two thirds are rented out will now have to apply for an additional HMO licence.....see below
"buildings which have been converted into self contained flats, where the conversion does not meet the standards set by the 1991 Building Regulations, and where less than two thirds of the flats are owner occupied (properties converted into 2 flats or maisonettes will only require a licence if both flats or maisonettes are rented)"
So as a freeholder of flats converted in the 1980s I now have to find out if any of the leaseholders are letting their flats and then pay the council for a licence
No you don't. You're confusing being a freeholder with being the landlord. "buildings which have been converted into self contained flats, where the conversion does not meet the standards set by the 1991 Building Regulations, and where less than two thirds of the flats are owner occupied (properties converted into 2 flats or maisonettes will only require a licence if both flats or maisonettes are rented)"
So as a freeholder of flats converted in the 1980s I now have to find out if any of the leaseholders are letting their flats and then pay the council for a licence
No I'm not
There is a "normal" HMO licence from the Environmental Health dept that I need for my student lets
There is now (in Exeter) a need for an "additional HMO licence" for a building of which I am the freeholder, it was converted pre 1991 and is more than two thirds let rather than owner occupied......see below.
This is a new thing that only came in this year and most people are unaware of, however if you don't get the licence you will automatically be charged an extra £300 when you do, plus if you really wind them up the possibility of fines. I will pass on the cost to the lucky leaseholders but how much should I charge for my time in filling out the form, finding out from the leaseholders (3 of them as I have the other two flats out of 5)if they are letting their flats or are owner occupiers. Or god forbid do I ruin the "quiet enjoyment" of anyone who may be renting and knocking on each flat door and asking"are you the owner or are you a tenant". I then pay +/-£1300 to the council and hope I get it back from the leaseholders
https://exeter.gov.uk/housing/private-tenants-and-...
There is a "normal" HMO licence from the Environmental Health dept that I need for my student lets
There is now (in Exeter) a need for an "additional HMO licence" for a building of which I am the freeholder, it was converted pre 1991 and is more than two thirds let rather than owner occupied......see below.
This is a new thing that only came in this year and most people are unaware of, however if you don't get the licence you will automatically be charged an extra £300 when you do, plus if you really wind them up the possibility of fines. I will pass on the cost to the lucky leaseholders but how much should I charge for my time in filling out the form, finding out from the leaseholders (3 of them as I have the other two flats out of 5)if they are letting their flats or are owner occupiers. Or god forbid do I ruin the "quiet enjoyment" of anyone who may be renting and knocking on each flat door and asking"are you the owner or are you a tenant". I then pay +/-£1300 to the council and hope I get it back from the leaseholders
https://exeter.gov.uk/housing/private-tenants-and-...
Rangeroverover said:
No I'm not
There is a "normal" HMO licence from the Environmental Health dept that I need for my student lets
There is now (in Exeter) a need for an "additional HMO licence" for a building of which I am the freeholder, it was converted pre 1991 and is more than two thirds let rather than owner occupied......see below.
This is a new thing that only came in this year and most people are unaware of, however if you don't get the licence you will automatically be charged an extra £300 when you do, plus if you really wind them up the possibility of fines. I will pass on the cost to the lucky leaseholders but how much should I charge for my time in filling out the form, finding out from the leaseholders (3 of them as I have the other two flats out of 5)if they are letting their flats or are owner occupiers. Or god forbid do I ruin the "quiet enjoyment" of anyone who may be renting and knocking on each flat door and asking"are you the owner or are you a tenant". I then pay +/-£1300 to the council and hope I get it back from the leaseholders
https://exeter.gov.uk/housing/private-tenants-and-...
I think this is a local authority initiative - and most restrict the requirement to certain types or property and or areas.There is a "normal" HMO licence from the Environmental Health dept that I need for my student lets
There is now (in Exeter) a need for an "additional HMO licence" for a building of which I am the freeholder, it was converted pre 1991 and is more than two thirds let rather than owner occupied......see below.
This is a new thing that only came in this year and most people are unaware of, however if you don't get the licence you will automatically be charged an extra £300 when you do, plus if you really wind them up the possibility of fines. I will pass on the cost to the lucky leaseholders but how much should I charge for my time in filling out the form, finding out from the leaseholders (3 of them as I have the other two flats out of 5)if they are letting their flats or are owner occupiers. Or god forbid do I ruin the "quiet enjoyment" of anyone who may be renting and knocking on each flat door and asking"are you the owner or are you a tenant". I then pay +/-£1300 to the council and hope I get it back from the leaseholders
https://exeter.gov.uk/housing/private-tenants-and-...
Rangeroverover said:
No I'm not
There is a "normal" HMO licence from the Environmental Health dept that I need for my student lets
There is now (in Exeter) a need for an "additional HMO licence" for a building of which I am the freeholder, it was converted pre 1991 and is more than two thirds let rather than owner occupied......see below.
This is a new thing that only came in this year and most people are unaware of, however if you don't get the licence you will automatically be charged an extra £300 when you do, plus if you really wind them up the possibility of fines. I will pass on the cost to the lucky leaseholders but how much should I charge for my time in filling out the form, finding out from the leaseholders (3 of them as I have the other two flats out of 5)if they are letting their flats or are owner occupiers. Or god forbid do I ruin the "quiet enjoyment" of anyone who may be renting and knocking on each flat door and asking"are you the owner or are you a tenant". I then pay +/-£1300 to the council and hope I get it back from the leaseholders
https://exeter.gov.uk/housing/private-tenants-and-...
That's not thought through and doesn't take account of the differences between freeholder and landlord.There is a "normal" HMO licence from the Environmental Health dept that I need for my student lets
There is now (in Exeter) a need for an "additional HMO licence" for a building of which I am the freeholder, it was converted pre 1991 and is more than two thirds let rather than owner occupied......see below.
This is a new thing that only came in this year and most people are unaware of, however if you don't get the licence you will automatically be charged an extra £300 when you do, plus if you really wind them up the possibility of fines. I will pass on the cost to the lucky leaseholders but how much should I charge for my time in filling out the form, finding out from the leaseholders (3 of them as I have the other two flats out of 5)if they are letting their flats or are owner occupiers. Or god forbid do I ruin the "quiet enjoyment" of anyone who may be renting and knocking on each flat door and asking"are you the owner or are you a tenant". I then pay +/-£1300 to the council and hope I get it back from the leaseholders
https://exeter.gov.uk/housing/private-tenants-and-...
For example an old Victorian building was converted in 1990, that is owned on a leasehold basis. This may produce a negligible ground rent. Let's say that it was converted into 6 individual flats. one is owned by an individual who lives there, one rented privately between friends as the owner is away travelling, one is rented in the private sector and the owner has never lived there, the other three are similarly rented in the private sector and the owner of all three has never lived there. None of the tenants or landlords are the freeholder.
There is no way the freeholder is responsible for the licence as on HMO. It should be the two landlords separately splitting the cost proportionately between them.
snorky782 said:
matjk said:
Large company's buy up free holds , they then apoint a management company , they don't look at (in my case) £40'000 free holds and think "ow cool we can buy that for 40k and over the next 100 years we will get back £300 a year!" They buy them to exploit the flaws in the system that allow them to make money other ways! Like commission returned insurance policy's that the leaseholders have to pay! Yes you can have the managment company removed but they will fight tooth and nail to remain . And you have to pay their legal bills along the way .
When ours change freeholder, our charges immediately went up 30% in real terms, over night ! Everyone complained and told tough, I googled ours , doesn't make pleasant reading, another dodgy one based in Southend on sea! Why are they all from there
See my point above. There are millions of houses, not flats, or gated communities, just normal houses, that are leasehold. There is no management company and there is no service charge for these properties. The freeholder doesn't sort out the insurance, or the mai tenance or anything at all, other than charging a fee for the lease of the ground that the house sits on aka ground rent . When ours change freeholder, our charges immediately went up 30% in real terms, over night ! Everyone complained and told tough, I googled ours , doesn't make pleasant reading, another dodgy one based in Southend on sea! Why are they all from there
People really need to learn the difference between a leasehold property and a management company, they are two separate entities.
It's not about the management charges, although those make more than sure it wipes it's nose, it's about the premium for extensions to leases. think of all those 99 year leases grated in the 1980's that need to be extended to make them mortgageable.
Rude-boy said:
Wait until the lease has less than 70 years left to run on it and then you will see why they are buying the freehold revisions...
It's not about the management charges, although those make more than sure it wipes it's nose, it's about the premium for extensions to leases. think of all those 99 year leases grated in the 1980's that need to be extended to make them mortgageable.
Once again, there is NO SERVICE CHARGE automatically applied to leasehold properties. I don't know why this concept is so hard for people to grasp. It's not about the management charges, although those make more than sure it wipes it's nose, it's about the premium for extensions to leases. think of all those 99 year leases grated in the 1980's that need to be extended to make them mortgageable.
These short leases all seem to be on expensive London property AFAICS and there is no precedent for this anywhere else in the UK. There are many parts of the U.K. where leasehold property is the norm amd these leases were granted with 999 year leases. Where's the problem there?
snorky782 said:
That's not thought through and doesn't take account of the differences between freeholder and landlord.
For example an old Victorian building was converted in 1990, that is owned on a leasehold basis. This may produce a negligible ground rent. Let's say that it was converted into 6 individual flats. one is owned by an individual who lives there, one rented privately between friends as the owner is away travelling, one is rented in the private sector and the owner has never lived there, the other three are similarly rented in the private sector and the owner of all three has never lived there. None of the tenants or landlords are the freeholder.
There is no way the freeholder is responsible for the licence as on HMO. It should be the two landlords separately splitting the cost proportionately between them.
I agree not thought through properly, however it is in place and we are expected to deal with itFor example an old Victorian building was converted in 1990, that is owned on a leasehold basis. This may produce a negligible ground rent. Let's say that it was converted into 6 individual flats. one is owned by an individual who lives there, one rented privately between friends as the owner is away travelling, one is rented in the private sector and the owner has never lived there, the other three are similarly rented in the private sector and the owner of all three has never lived there. None of the tenants or landlords are the freeholder.
There is no way the freeholder is responsible for the licence as on HMO. It should be the two landlords separately splitting the cost proportionately between them.
matjk said:
They buy them to exploit the flaws in the system that allow them to make money other ways! Like commission returned insurance policy's that the leaseholders have to pay!
I came across this scam when I worked at an insurance broker. Company A are appointed as Management Company but rather than just get the most competitive property insurance they are "introduced" to an insurance broker by Company B, who happens to be owned by the same person as Company A. The insurance broker provides a not-particularly-competitive insurance policy at zero discount to Company A who pass it on to the leaseholders. The insurance broker then pays Company B a substantial payaway/introducer fee.This only came to light when the payaway to one such company went over £100k and it prompted an investigation. We stopped brokering policies for management companies pretty swiftly afterwards.
ralphrj said:
I came across this scam when I worked at an insurance broker. Company A are appointed as Management Company but rather than just get the most competitive property insurance they are "introduced" to an insurance broker by Company B, who happens to be owned by the same person as Company A. The insurance broker provides a not-particularly-competitive insurance policy at zero discount to Company A who pass it on to the leaseholders. The insurance broker then pays Company B a substantial payaway/introducer fee.
This only came to light when the payaway to one such company went over £100k and it prompted an investigation. We stopped brokering policies for management companies pretty swiftly afterwards.
You're describing the actions of a Management Company, not a freeholder. There are many, many freeholders who have no action as a Management company at all. Take a look at Jones Homes in the NW. This only came to light when the payaway to one such company went over £100k and it prompted an investigation. We stopped brokering policies for management companies pretty swiftly afterwards.
They are the freeholder of thousands of properties. On most they simply collect ground rent and will continue tondo so for the next 900+ years before the lease needs renegotiating. On others, such as flats or gated community type things, they may act as Management Company too, or they may not even if they are the Freeholder.
Rangeroverover said:
I agree not thought through properly, however it is in place and we are expected to deal with it
I still think your more likely on the hook as a landlord of some of the properties and should be looking to split the cost if any of the other properties are let, with that landlord. It's also not an issue of impacting on the peaceful enjoyment if you write a letter as the freeholder to all occupiers to ask for the info around their status as tenants or owner occupiers.
ralphrj said:
I came across this scam when I worked at an insurance broker. Company A are appointed as Management Company but rather than just get the most competitive property insurance they are "introduced" to an insurance broker by Company B, who happens to be owned by the same person as Company A. The insurance broker provides a not-particularly-competitive insurance policy at zero discount to Company A who pass it on to the leaseholders. The insurance broker then pays Company B a substantial payaway/introducer fee.
This only came to light when the payaway to one such company went over £100k and it prompted an investigation. We stopped brokering policies for management companies pretty swiftly afterwards.
This only came to light when the payaway to one such company went over £100k and it prompted an investigation. We stopped brokering policies for management companies pretty swiftly afterwards.
There are several Management Companies that operate, in a different name, their own insurance brokers, their own building repairs company, gardening, cleaning company etc. etc., with in the case of the former 100% to 200% mark up on the insurance premiums.Section 21 Of the Landlord & Tenant Act 1985 accords a leaseholder the legal right to have a copy of the Building Insurance Certificate from the Management Company, try it and see how much you are being Ripped Off.
hora said:
Our freeholder offered the freehold to us for £600. Reading this I might just take them up on it.
You should definitely think about this offer.In 2000 we bought a new build house with a 99 year lease. At the time we were offered to buy the freehold for £1000 but we turned it down as we were strapped for cash - bad mistake. Last year I put they house up for sale and was advised to buy the freehold. When I made an inquiry to the leaseholder they came back with £14750! Apparently the lease had been bought and sold several times as companies look to make a profit on people realising that they need to renew or buy the lease to make it attractive to prospective buyers. I then paid a surveyor £300 to do the negotiations on my behalf and after 4 months of back and forth they came back with a final offer of £5657. It shows how much these leasehold companies know they are taking the P when they are prepared to drop the asking price by 9 grand just because someone pestered them with a few letters. Karma's gonna get them.
Thud_Mcguffin said:
You should definitely think about this offer.
In 2000 we bought a new build house with a 99 year lease. At the time we were offered to buy the freehold for £1000 but we turned it down as we were strapped for cash - bad mistake. Last year I put they house up for sale and was advised to buy the freehold. When I made an inquiry to the leaseholder they came back with £14750! Apparently the lease had been bought and sold several times as companies look to make a profit on people realising that they need to renew or buy the lease to make it attractive to prospective buyers. I then paid a surveyor £300 to do the negotiations on my behalf and after 4 months of back and forth they came back with a final offer of £5657. It shows how much these leasehold companies know they are taking the P when they are prepared to drop the asking price by 9 grand just because someone pestered them with a few letters. Karma's gonna get them.
A new build with a 99 year lease? Where approximately?In 2000 we bought a new build house with a 99 year lease. At the time we were offered to buy the freehold for £1000 but we turned it down as we were strapped for cash - bad mistake. Last year I put they house up for sale and was advised to buy the freehold. When I made an inquiry to the leaseholder they came back with £14750! Apparently the lease had been bought and sold several times as companies look to make a profit on people realising that they need to renew or buy the lease to make it attractive to prospective buyers. I then paid a surveyor £300 to do the negotiations on my behalf and after 4 months of back and forth they came back with a final offer of £5657. It shows how much these leasehold companies know they are taking the P when they are prepared to drop the asking price by 9 grand just because someone pestered them with a few letters. Karma's gonna get them.
hora said:
Our freeholder offered the freehold to us for £600. Reading this I might just take them up on it.
Why? What are you worried about? How long is the lease and how much is your ground rent. Not your service charge of you pay one as that will be unaffected by ownership of the freehold. Snorky is right, there are different types of lease hold, and i agree the 999 year ones with no management company are totally different. But i bet the OP is not in this boat, and has been mugged off by the usual freeholder/leaseholder/mangament company structure.I actually felt a bit guilty when i sold my flat to the guy, but all these flats are pretty much the same. Whats bonkers is when you take the £110 maintenance fee, plus the insurance and the ground rent into account a small free hold house is almost the same cost. These flats always hover at the exact point in price your average Joe can 'just' get a mortgage on, another £20k is out of reach, but they spend way more over the life of the mortgage and its dead money , gone in someones pocket.
"Why? What are you worried about? How long is the lease and how much is your ground rent. Not your service charge of you pay one as that will be unaffected by ownership of the freehold."
It will be affected, as freeholder you can appoint who you like, get insurance from where you like, get cleaners from where you like etc....
for example our cleaner was charging (and im not making this up) £80 for half an hour once every 2 weeks. I asked if we could get our own cleaner in, they said yes but they have to meet our criteria which was they had to accept payment on 150 day terms (even thought we pay up front) & £25 million of public liability insurance. Of course i couldn't find anyone to do the job, but they did, the company they used for all their cleaning contracts and maintenance shared an address and directors sir names with themselves. No conflict there then! Our insurance was well over £1600 for 6 flats, building only. NUF said they would do it for £490 with better company, but no dice.
Its legalised theft on a national scale, and no one can be arsed with the hassle to get out of it , they just bend over and pay their £1500 a year like good little mugs. well thats what i did anyway
It will be affected, as freeholder you can appoint who you like, get insurance from where you like, get cleaners from where you like etc....
for example our cleaner was charging (and im not making this up) £80 for half an hour once every 2 weeks. I asked if we could get our own cleaner in, they said yes but they have to meet our criteria which was they had to accept payment on 150 day terms (even thought we pay up front) & £25 million of public liability insurance. Of course i couldn't find anyone to do the job, but they did, the company they used for all their cleaning contracts and maintenance shared an address and directors sir names with themselves. No conflict there then! Our insurance was well over £1600 for 6 flats, building only. NUF said they would do it for £490 with better company, but no dice.
Its legalised theft on a national scale, and no one can be arsed with the hassle to get out of it , they just bend over and pay their £1500 a year like good little mugs. well thats what i did anyway
matjk said:
"Why? What are you worried about? How long is the lease and how much is your ground rent. Not your service charge of you pay one as that will be unaffected by ownership of the freehold."
It will be affected, as freeholder you can appoint who you like, get insurance from where you like, get cleaners from where you like etc....
for example our cleaner was charging (and im not making this up) £80 for half an hour once every 2 weeks. I asked if we could get our own cleaner in, they said yes but they have to meet our criteria which was they had to accept payment on 150 day terms (even thought we pay up front) & £25 million of public liability insurance. Of course i couldn't find anyone to do the job, but they did, the company they used for all their cleaning contracts and maintenance shared an address and directors sir names with themselves. No conflict there then! Our insurance was well over £1600 for 6 flats, building only. NUF said they would do it for £490 with better company, but no dice.
Its legalised theft on a national scale, and no one can be arsed with the hassle to get out of it , they just bend over and pay their £1500 a year like good little mugs. well thats what i did anyway
And again. You're confusing the freeholder with the management company. I don't understand why this is so difficult for people. It will be affected, as freeholder you can appoint who you like, get insurance from where you like, get cleaners from where you like etc....
for example our cleaner was charging (and im not making this up) £80 for half an hour once every 2 weeks. I asked if we could get our own cleaner in, they said yes but they have to meet our criteria which was they had to accept payment on 150 day terms (even thought we pay up front) & £25 million of public liability insurance. Of course i couldn't find anyone to do the job, but they did, the company they used for all their cleaning contracts and maintenance shared an address and directors sir names with themselves. No conflict there then! Our insurance was well over £1600 for 6 flats, building only. NUF said they would do it for £490 with better company, but no dice.
Its legalised theft on a national scale, and no one can be arsed with the hassle to get out of it , they just bend over and pay their £1500 a year like good little mugs. well thats what i did anyway
I own several leasehold properties. Nobody other than me arranges insurance, cleaning etc. I pay the freeholder a ground rent for which they do nothing. One property has a ground rent of 30p as it was built in 1878 with a 990 year lease. This has never been collected. The most modern house (built 1994) has a ground rent of £80 per annum which rises by £20 every 20 years for the duration of the 999 year lease. All the freeholder does is collect the ground rent amd nothing else.
If I lived in a block of flats / gated community / estate with shared facilities then I would also pay a separate service charge which would cover cleaning, maintenance, building insurance (possibly) amd other advice elements. However, in this case if I bought the freehold, I would still have to pay the service charge as it is a separate charge.
Gassing Station | Speed, Plod & the Law | Top of Page | What's New | My Stuff