Ground Rent demand
Discussion
Gavia said:
I pay the ground rent annually and that's it. There is no other contact with anyone. I don't get this obsession around leasehold vs freehold.
I'll lay odds that anyone who's posted anything negative about leasehold lives in the South East
Sheffield here...I'll lay odds that anyone who's posted anything negative about leasehold lives in the South East
Our freeholder is a predatory outfit who charge extortionate admin fees when they are not entitled to. There are various restrictions in our lease such as no external fencing, no trees over a certain height, replacement windows must be as original (good luck with that for a house built in the 60's), no internal or external brickwork to be altered without consent.
Anytime we have tried to make contact with them they won't even speak to us without a £100 admin fee (even though this isn't in the lease terms), and they have past form for taking leaseholders to court for very minor issues, so we want shot of them as soon as we can.
We are also indemnified up to the hilt due to historic issues with house.
S11Steve said:
Sheffield here...
Our freeholder is a predatory outfit who charge extortionate admin fees when they are not entitled to. There are various restrictions in our lease such as no external fencing, no trees over a certain height, replacement windows must be as original (good luck with that for a house built in the 60's), no internal or external brickwork to be altered without consent.
Anytime we have tried to make contact with them they won't even speak to us without a £100 admin fee (even though this isn't in the lease terms), and they have past form for taking leaseholders to court for very minor issues, so we want shot of them as soon as we can.
We are also indemnified up to the hilt due to historic issues with house.
I really don't understand these issues though. I've had those terms in mine and much, much more. I've never spoken or written to the freeholder and I've extended houses, added garages, changed windows (and style) and so on. I've got daft rules like no vans (ignored by me and loads of others), no sky dishes tonthe front of a property (ignored by everyone), no illegal drugs (cough). The best one was no fornicating unless married, which was roundly ignored obviously. Our freeholder is a predatory outfit who charge extortionate admin fees when they are not entitled to. There are various restrictions in our lease such as no external fencing, no trees over a certain height, replacement windows must be as original (good luck with that for a house built in the 60's), no internal or external brickwork to be altered without consent.
Anytime we have tried to make contact with them they won't even speak to us without a £100 admin fee (even though this isn't in the lease terms), and they have past form for taking leaseholders to court for very minor issues, so we want shot of them as soon as we can.
We are also indemnified up to the hilt due to historic issues with house.
There is nothing that they can do to stop you doing what you want to the house at all, nor do they want to. Of course there are a few sharks out there, but these are small compared to the majority of freeholders who are fine.
The other thing is that many people struggle to differentiate between a freeholder and a management company. Sometimes these appear to be the same comp at, but they are very distinct in law. Buying a freehold does not remove the service charge to the management company.
SystemParanoia said:
As the new freeholder, can you not choose your own management company, or simply not have one at all ?
Depends what you're buying. A friend of mine lives in a gated community in a four bed semi. He could buy his own freehold, but he would still have to contribute to the maintenance of the gated area via the service charge. He can't declare himself independent and set up his own management company for his little bit of the gated area. So he's stuck with the existing management company good or bad. Whereas a semi that I rent out is leasehold, but just a normal house off a normal road. I have no management company and I pay no service charge. I do pay ground rent of c£50 a year to the freeholder. There is zero value in me trying to buy a lease that has defined terms for the next 980 years that can't be altered.
Gavia said:
There is nothing that they can do to stop you doing what you want to the house at all, nor do they want to. Of course there are a few sharks out there, but these are small compared to the majority of freeholders who are fine.
The other thing is that many people struggle to differentiate between a freeholder and a management company. Sometimes these appear to be the same comp at, but they are very distinct in law. Buying a freehold does not remove the service charge to the management company.
It depends on the lease, but more and more conveyancing solicitors are delving into the the terms closer now after being burned in the past for undeclared alterations and lack of freeholder permission We had a nightmare with the lease when we purchased, and for the sake of resale, we want to take that problem away.The other thing is that many people struggle to differentiate between a freeholder and a management company. Sometimes these appear to be the same comp at, but they are very distinct in law. Buying a freehold does not remove the service charge to the management company.
This is our freeholder and managment company - and this is exactly why we don't want any involvement with them - http://www.leaseholdknowledge.com/tchenguiz-family...
S11Steve said:
It depends on the lease, but more and more conveyancing solicitors are delving into the the terms closer now after being burned in the past for undeclared alterations and lack of freeholder permission We had a nightmare with the lease when we purchased, and for the sake of resale, we want to take that problem away.
This is our freeholder and managment company - and this is exactly why we don't want any involvement with them - http://www.leaseholdknowledge.com/tchenguiz-family...
They seem like one of the Sharks, but getting around that problem is bread and butter for any half decent solicitor. Whether you think you're doing well or not, you're still giving them a nice chunk of money in one hit. This is our freeholder and managment company - and this is exactly why we don't want any involvement with them - http://www.leaseholdknowledge.com/tchenguiz-family...
Gavia said:
They seem like one of the Sharks, but getting around that problem is bread and butter for any half decent solicitor. Whether you think you're doing well or not, you're still giving them a nice chunk of money in one hit.
They are definitely one of the sharks, and on balance I'd rather pay one solicitor a fee to buy the freehold, than to have any obligation to them for the next 15-20 years. The tribunal calculator has the purchase value around £700, with another £500 or so in fees on top of that. We've already wasted a fair amount during the conveyancing getting information and consents from them, and with future plans we have for the house, would end up being expected to pay another few thousand in consent fees, or solicitor fees arguing why we shouldn't pay their admin charges.SystemParanoia said:
So i can sell my home, and every home i will own in future as a leasehold, and hold onto an annual income for the rest of my decedents lives for the next 999 years ?
purely because i choose to not sell it as i purchased it.. as a freehold ?
If you're prepared to stump up the upfront costs to set it up as a leasehold then yes. The income level might dictate the value of the property though. purely because i choose to not sell it as i purchased it.. as a freehold ?
S11Steve said:
They are definitely one of the sharks, and on balance I'd rather pay one solicitor a fee to buy the freehold, than to have any obligation to them for the next 15-20 years. The tribunal calculator has the purchase value around £700, with another £500 or so in fees on top of that. We've already wasted a fair amount during the conveyancing getting information and consents from them, and with future plans we have for the house, would end up being expected to pay another few thousand in consent fees, or solicitor fees arguing why we shouldn't pay their admin charges.
Fair enough. I was just trying to show that leasehold doesn't automatically equal bad. It's too easy for people to latch onto the small amount of issues and blow them out of all proportion, much like SystemParanoia (very apt username) did and continues to. Gavia said:
SystemParanoia said:
So i can sell my home, and every home i will own in future as a leasehold, and hold onto an annual income for the rest of my decedents lives for the next 999 years ?
purely because i choose to not sell it as i purchased it.. as a freehold ?
If you're prepared to stump up the upfront costs to set it up as a leasehold then yes. The income level might dictate the value of the property though. purely because i choose to not sell it as i purchased it.. as a freehold ?
Edit: Im distrustful by default. i will be researching into it, but bad news is easier to find than good
SystemParanoia said:
Makes more financial sense to do it as a 100 year lease in that case, and then gouge the leaseholders for an extension once per generation
Except that would be nigh on impossible to manage and the property would quickly become unsaleable due to the remaining term of the lease. Don't forget that the house down the road that is freehold compared to your contrived leasehold will be far more attractive to any buyer, so you'll have to drop your price. That means sacrificing upfront cash for a drip fed income. If every house is leasehold on a nominal ground rent with centuries left on the lease, then it is completely irrelevant.
they type of lease Gavia is talking about are not common these days and tend to be associated with older more expensive properties. Your average 1-2 bed flat build in the last 20 years is almost certainly going to be on some 99-125 year lease, with a free holder and a management company set up.
A solicitor is not going to find it easy to get bits changed, you either buy it or you don't. I personally will NEVER touch another lease hold, and by that i mean the 100ish year types. They are a scam and it needs regulating, normally if you add the maintenance, say 100 a month plus GR onto your mortgage repayment you are almost a freehold prices anyway. You are pouring money down the drain with these places. but i guess its a start on the ladder
A solicitor is not going to find it easy to get bits changed, you either buy it or you don't. I personally will NEVER touch another lease hold, and by that i mean the 100ish year types. They are a scam and it needs regulating, normally if you add the maintenance, say 100 a month plus GR onto your mortgage repayment you are almost a freehold prices anyway. You are pouring money down the drain with these places. but i guess its a start on the ladder
matjk said:
they type of lease Gavia is talking about are not common these days and tend to be associated with older more expensive properties. Your average 1-2 bed flat build in the last 20 years is almost certainly going to be on some 99-125 year lease, with a free holder and a management company set up.
A solicitor is not going to find it easy to get bits changed, you either buy it or you don't. I personally will NEVER touch another lease hold, and by that i mean the 100ish year types. They are a scam and it needs regulating, normally if you add the maintenance, say 100 a month plus GR onto your mortgage repayment you are almost a freehold prices anyway. You are pouring money down the drain with these places. but i guess its a start on the ladder
Sorry, but that's wrong. The North West is full of new build houses & flats on 999 year leases at sensible figures. There are no management companies on normal houses in normal streets. You're just perpetuating the myth. A solicitor is not going to find it easy to get bits changed, you either buy it or you don't. I personally will NEVER touch another lease hold, and by that i mean the 100ish year types. They are a scam and it needs regulating, normally if you add the maintenance, say 100 a month plus GR onto your mortgage repayment you are almost a freehold prices anyway. You are pouring money down the drain with these places. but i guess its a start on the ladder
I've edited to add this link in for a major house builder. This is straight off their website and point 3 paragraph 3 confirms that all their new build houses are sold with 999 year leases and flats with 125 year leases. Look how many houses they build in comparison to flats to see how popular these leases still are. There is no problem with this. I own about 5 of their houses that I rent out and pay no more than £50 a year on any of them and have bpnevernever, ever spoken to them about anything I've done workwise on any of my houses including extensions, garages and replacement work.
http://www.jones-homes.co.uk/pdf/homebuyersguide.p...
Edited by Gavia on Wednesday 15th February 19:13
Gavia said:
There is nothing that they can do to stop you doing what you want to the house at all, nor do they want to.
Yes there is. Of course it depends what your lease says but every lease I've read prohibits stuctural alterations either completely or without prior freeholder consent. Similar story for altering the exterior of the building or making additions to the building.
Doing these works without consent is a breach of the lease and can ultimately end up in forfeiture.
When the breach is discovered the freeholders are well within their rights to serve notice on you to either remedy the breach within a reasonable timescale or demand you pay pretty much whatever they think they can get away with (costs will need to be proved reasonable if challenged) for them to grant retrospective consent; if they decide they want to grant consent.
External works like you have mentioned should be picked up on building inspections but it sounds like your freeholders don't bother with them or don't care - lucky you I guess.
ETA. A diligent solicitor acting for a purchaser will create a ball ache for the seller come sale time when enquiries are made about layout changes / additions etc and where the consents are. They don't want their clients inheriting breaches that they will have to put right down the line.
Edited by OMNIO on Wednesday 15th February 23:21
OMNIO said:
Yes there is.
Of course it depends what your lease says but every lease I've read prohibits stuctural alterations either completely or without prior freeholder consent. Similar story for altering the exterior of the building or making additions to the building.
Doing these works without consent is a breach of the lease and can ultimately end up in forfeiture.
When the breach is discovered the freeholders are well within their rights to serve notice on you to either remedy the breach within a reasonable timescale or demand you pay pretty much whatever they think they can get away with (costs will need to be proved reasonable if challenged) for them to grant retrospective consent; if they decide they want to grant consent.
External works like you have mentioned should be picked up on building inspections but it sounds like your freeholders don't bother with them or don't care - lucky you I guess.
ETA. A diligent solicitor acting for a purchaser will create a ball ache for the seller come sale time when enquiries are made about layout changes / additions etc and where the consents are. They don't want their clients inheriting breaches that they will have to put right down the line.
And this is where the pedantry of PH becomes a burden. Of course it depends what your lease says but every lease I've read prohibits stuctural alterations either completely or without prior freeholder consent. Similar story for altering the exterior of the building or making additions to the building.
Doing these works without consent is a breach of the lease and can ultimately end up in forfeiture.
When the breach is discovered the freeholders are well within their rights to serve notice on you to either remedy the breach within a reasonable timescale or demand you pay pretty much whatever they think they can get away with (costs will need to be proved reasonable if challenged) for them to grant retrospective consent; if they decide they want to grant consent.
External works like you have mentioned should be picked up on building inspections but it sounds like your freeholders don't bother with them or don't care - lucky you I guess.
ETA. A diligent solicitor acting for a purchaser will create a ball ache for the seller come sale time when enquiries are made about layout changes / additions etc and where the consents are. They don't want their clients inheriting breaches that they will have to put right down the line.
Edited by OMNIO on Wednesday 15th February 23:21
Do you think that I could forfeit my 2 up 2 down terrace because the lease which was written in 1824 forbids any fornication between unmarried couples?
S11Steve said:
This is our freeholder and managment company - and this is exactly why we don't want any involvement with them - http://www.leaseholdknowledge.com/tchenguiz-family...
As soon as I saw that name in the link I didn't need to read the article to know it was bad news.The management company backed down on that demand btw - http://www.leaseholdknowledge.com/tchenguiz-backs-...
Anyone intending to buy a property which that company manages should think very hard before deciding to proceed.
If the freholder sells out to another company/investor who uses them that's not a nice position to find yourself in.
Red Devil said:
As soon as I saw that name in the link I didn't need to read the article to know it was bad news.
The management company backed down on that demand btw - http://www.leaseholdknowledge.com/tchenguiz-backs-...
Anyone intending to buy a property which that company manages should think very hard before deciding to proceed.
If the freholder sells out to another company/investor who uses them that's not a nice position to find yourself in.
I would certainly never buy anywhere linked with them.The management company backed down on that demand btw - http://www.leaseholdknowledge.com/tchenguiz-backs-...
Anyone intending to buy a property which that company manages should think very hard before deciding to proceed.
If the freholder sells out to another company/investor who uses them that's not a nice position to find yourself in.
Another reason we bought our freehold was because we have our own management company in place to run the joint. This has worked very nicely for the last decade and we wouldn't want a random freeholder sticking their oar in and insisting we use them or one of their companies at whatever rate they decided to charge us...!
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