Selling a flat, freeholder taking the p**s

[Thud_Mcguffin]

snorky782 said:

A new build with a 99 year lease? Where approximately?

Northumberland. A big problem around here. Even with all the media attention they are still building houses even now with a 99 year lease.

http://www.thisismoney.co.uk/money/mortgageshome/a...

[snorky782]

Thud_Mcguffin said:

snorky782 said:

A new build with a 99 year lease? Where approximately?

Northumberland. A big problem around here. Even with all the media attention they are still building houses even now with a 99 year lease.

http://www.thisismoney.co.uk/money/mortgageshome/a...

That's mental. I think leasehold gets a raw deal though in the press as it's often written by southern based journalists who simply don't understand the regional variations.

We have loads in the NW that are leasehold, I pn fact the majority are, but all on 999 year leases when new, so it'll never be an issue when most ground rents will fade into insignificance fairly quickly. My last home was just shy of £500000 when sold with a lease remaining of c965 years at £40 pa. No need to buy that out and no increase in vlaue on the property if I did.

[Wings]

surveyor said:

I think this is a local authority initiative - and most restrict the requirement to certain types or property and or areas.

Part of the Housing Act 2004, and not just HMOs but also residential lettings. Licence is required by the owner, with details of the management, agents registered with checks carried out on the same. Area in Bristol now requiring application for licence, initial cost for the same £450, then after 1st July £1000 per property. Within a certain time copies of Gas Safety Certificate, Electrical Inspection Certificate and EPC must be produced to the council's Environmental Office, plus full details and numbers of tenants in each property, 10 year smoke alarms on each floor, with contact details of person/s managing rental property, left with nearby neighbours of rental property.

This is just not another means of data collecting, but also a very lucrative revenue collection scheme.

[Ken Figenus]

Snorky - you are very patient mate

Re 'tenant protecting'landslides in bureaucracy and regs by ohh so proactive local councils...they cant see the wood for the trees. There are plenty of statutes to deal with cr@p landlords already. So, these alleged Robin Hoods don't even realise that if they bureaucratically increase any suppliers' costs by £1k pa then £1.5k gets passed on to the end user that they are crowing about altruistically helping but in reality they are mostly feathering their own nests/existence by interference and twiddling...

[matjk]

I understand the difference Snoky , BUT you seem to struggle with the concept that SOME freeholders appoint Managment company's that overcharge and employ sharp practices as it directly benefits the freeholders.
You keep banging on about the same point ! Yes we get it but I can link 1000 of examples
http://www.thisismoney.co.uk/money/mortgageshome/a...
http://www.lettingfocus.com/blogs/2011/10/consent-...
http://www.independent.co.uk/money/spend-save/leas...

But you will just say the freeholder doesn't deal with the maintenance , what's so hard to grasp, also WTF did they bother with all the right to manage legislation, waste of time according to you as nothing to do with the freeholder again!!

[snorky782]

matjk said:

I understand the difference Snoky , BUT you seem to struggle with the concept that SOME freeholders appoint Managment company's that overcharge and employ sharp practices as it directly benefits the freeholders.
You keep banging on about the same point ! Yes we get it but I can link 1000 of examples
http://www.thisismoney.co.uk/money/mortgageshome/a...
http://www.lettingfocus.com/blogs/2011/10/consent-...
http://www.independent.co.uk/money/spend-save/leas...

But you will just say the freeholder doesn't deal with the maintenance , what's so hard to grasp, also WTF did they bother with all the right to manage legislation, waste of time according to you as nothing to do with the freeholder again!!

You're missing my point. There are 10,000s of houses that are leasehold where there is no Management Company. Everyone talks as if a leasehold house has to have a service fee via a Management Company amd they don't. I know, I own quite a few houses that are leasehold and don't have any Management Company.

The fact that some do and are being ripped off by the Management Company is an issue for the residents to deal with directly with the Management Company, not the freeholder. Even if they are the same person they will be separate entities in a legal sense. Anyone paying a service charge has a lot of rights and these can easily be exploited when necessary.

[anonymous-user]

nitrodave said:

I don't want to hold things up further and he won't do it until he is paid.

Well that's the long and short of it, no? Pay him and move on.

It all depends what's more important to you: getting the deal done, or getting a discount off £600. If it's the latter then sit it out. But be prepared to lose the deal. Pyrrhic victory if the freeholder agrees to come down from £600 then though.

[nitrodave]

Greg66 said:

nitrodave said:

I don't want to hold things up further and he won't do it until he is paid.

Well that's the long and short of it, no? Pay him and move on.

It all depends what's more important to you: getting the deal done, or getting a discount off £600. If it's the latter then sit it out. But be prepared to lose the deal. Pyrrhic victory if the freeholder agrees to come down from £600 then though.

He has been paid by bank transfer the the same day he told me how much it would be. I want this done as a matter of urgency and as of today, my solicitor still has not received what we need. It is the last thing holding up the sale now.

As a bit of background on my situation, the flat is on the second floor above shops in stoke newington, london. We have a share of freehold which means any maintenance costs are paid when work needs doing. The share of freehold was purchased by us because we didn't want to pay moronic management charges and get unexpected bills. The maintenance costs are shared between us, the flat below and the owner of the shop below - who owns the freehold.

If it wasn't fur us, the communal areas would go to wreck n ruin. We are the ones who instigated decorating and upkeep. All we pay is ground rent... thankfully at £140 p/a.

My gripe is that the freeholder is taking weeks to tick a few boxes on a couple of sheets of paper and wants and extortionate amount for doing so. I'll be glad to see the back of him when this is over.

We are buying a house and will be the freeholders so no more ground rent and dependence on incompetent fools.

[Slushbox]

I'd write/phone the freeholder and make an offer of £300 for a 'swift' result.

But:

I was the Director of a small management registered company for residents of a Victorian house converted into five flats. Leaseholders wouldn't pay their buildings insurance share, annual Companies House fees, accountants fees, roof repairs or anything else. Dealing with the Freehold and years of leaseholder 'we no pay' problems took days of my unpaid time.

Eventually it came down to me paying all the fees personally, so pulled together a Residents Meeting, and told them they'd have real problems selling if they didn't pay for repairs and everything else outstanding.

Our solicitor charged for everything, so I got the leaseholders to vote on their agreed fee of £300 to change leases. Sure enough, one sold up soon after and refused to pay the £300.

Result was a letter from their solicitor challenging the 'right' to charge £300. Wrote back with Minutes of Meeting agreeing the fees. Leaseholder still refused to pay, sale fell through because of delays. Endless aggro resulted.

Leasholder properties can be minefields. Once bitten, etc. Would never 'buy' another leasehold property.

[nitrodave]

The problem is not with us, it's with the freeholder. He has been paid within hours of telling us how much he wanted and still nothing back from him.

In the last year we had a leak from the roof. After much hassling we got a response from the freeholder stating the issue and that £1500 work needs doing. We paid it and spent months chasing him for his share of this. The other flat owner below us paid the moment we asked.

We had the communal hallway decorated and it was just the same. Weeks of hassling until we got any response and agreement from him. We got several quotes, went with the best, got the work done and paid for it ourselves. We are the ones who chased the freeholder for his share of the cost.

If our sale falls through because of him, I will seek legal advice on the matter.

[snorky782]

You can seek legal advice, but it should be that you don't have a case against him. Did you specify a deadline in your questions?

[nitrodave]

snorky782 said:

You can seek legal advice, but it should be that you don't have a case against him. Did you specify a deadline in your questions?

That's where there is a massive flaw in the system. Freeholding needs regulating, and individuals with such responsibilities should have rules and ethics to abide to. Thankfully our buyer of the flat and the sellers of the house are being pretty understanding.

I am leaving it to my solicitor to chase him now as I have had enough of trying. Any decent person would just do this rather face being hassled every day.

[snorky782]

nitrodave said:

That's where there is a massive flaw in the system. Freeholding needs regulating, and individuals with such responsibilities should have rules and ethics to abide to. Thankfully our buyer of the flat and the sellers of the house are being pretty understanding.

I am leaving it to my solicitor to chase him now as I have had enough of trying. Any decent person would just do this rather face being hassled every day.

I've never understood the clamour for regulation when something goes awry. Those who are doing this ethically now, will continue to, but will apply charges to cover the regulation and those that weren't doing it ethically, will continue not to.

[superlightr]

We as a business used to run some management companies for various blocks of flats and estates. It was a right royal pain. I was the company secretary for many of them.

Why? The directors didn't want to pay very much for us to run them, ie it was not cost effective to do. We thus arranged that we would charge a nominal sum to manage the properties but recover our cost from any sale enquires. We would charge about £250 for replying (ten years ago). BTW its not just ticking a few boxes - often the solicitors would want extensive and detailed information back along with numerous copies of all sorts of paperwork, they may want a variation which again entails other legal obligations on us to do.

We would deal with many sales and enquires all the time, we would turn them around in 2 weeks ish.

The actual management of a block of flats is very time consuming and fraught with legal liability and penalties if you get it wrong. Arranging building ins/gardening/maintenance/parking and having say 60 residents all wanting something different is a lot of work.

In the end we dropped all of our estate management as the laws were changing too much, the residents would always moan at all of the expenditure and costs, the directors interfered too much making it more costly to run then anticipated and then didn't like being told that its going to cost them more if they want to approve everything we do etc.

Attending AGM's out of office hours were things I could no longer keep my sanity and keeping professional. We had about 8 AGMs each year over 20 years each with between 30-60 flats/houses and there is only so much of the same moans you can put up with especially when the cost/profit was just not there. Just getting AGMS circulated/approved was so painful
The long and short is that a good management company will charge what most residents think is extortionate but its not as they don't understand the work/risk/issues and also depending on if they have a low monthly fee but charge more per solicitors enquiries.

In the end we concentrated on another area of property which was more cost/time effective for us.

Edited by superlightr on Thursday 28th July 13:13

Edited by superlightr on Thursday 28th July 13:13

[fatandwheezing]

snorky782 said:

You're missing my point. There are 10,000s of houses that are leasehold where there is no Management Company. Everyone talks as if a leasehold house has to have a service fee via a Management Company amd they don't. I know, I own quite a few houses that are leasehold and don't have any Management Company.

This actually caused us an issue selling our last house. Technically leasehold, but no record of who the freeholder was, and no ground rent had ever been paid. I suspect that they had just found somewhere they liked more, but our buyer pulled out as they insisted on buying out the leasehold, and couldn't get their heads around it.

[snorky782]

fatandwheezing said:

This actually caused us an issue selling our last house. Technically leasehold, but no record of who the freeholder was, and no ground rent had ever been paid. I suspect that they had just found somewhere they liked more, but our buyer pulled out as they insisted on buying out the leasehold, and couldn't get their heads around it.

One of my houses has a 30p pa ground rent. I've owned it for 23 years and it's never been collected. It hasn't been collected since the 70s and there is a small pot building up of 30ps collected form prior owners who've sold and just knocked it off the price to cover in case anyone ever buys it.

If I sell in around another 20 years then I'll knock off 60 years worth of ground rent at £18. I hope nobody ever wants to buy the lease. There again, this house is the first of a larger row of terraces the smaller rows have a genuine ground rent of 5 peppercorns pa.

We're used to leasehold property though in the town I live, most houses are.

[megaphone]

nitrodave said:

We have a share of freehold which means any maintenance costs are paid when work needs doing. The share of freehold was purchased by us because we didn't want to pay moronic management charges and get unexpected bills. The maintenance costs are shared between us, the flat below and the owner of the shop below - who owns the freehold.
.

I don't understand, you say you have a share of the freehold? So you don't have a lease? So you are a freeholder?

[superlightr]

leaseholders can hold a share in the freehold company which owns the freehold to the properties. ie a 1/60th share on the freehold company if there are 60 flats.

[nitrodave]

Whilst we own a third of the block through a share of freehold, legally, as it is a flat, it is required to be under leasehold status and we must pay ground rent.

By having a share of freehold we aren't held to ransom by a management company who want monthly charges for it's upkeep. Between us we share that responsibility, which has been more cost effective to live in and makes the property appealing when it came to sell.

We pay for what needs doing, not pay a management company just in case something needs doing. We also remove the risk of being ripped off like so many others are as we are in control of the expenditure of upkeep.

We get to choose who does maintenance work and who cleans the communal areas.

Only now, we are being ripped off at the time of sale.

[megaphone]

So if you own a share of the freehold, why can't you fill out the form? Who is the 'freeholder' you are asking to fill it out? Surely they are just a joint freeholder as well?

Just inquisitive how all this works.