Ground Rent demand

[Gavia]

Fastpedeller said:

Apologies, as I didn't make my statement clear. What I meant to say was

But if every potential buyer refused to buy a new leasehold property the developers would be forced to sell them freehold.

This may seem a bold statement (and potentially the developers would drop the price until someone bought them), but if NOBODY bought them the developers would have to change their ways. The issue IMHO is that the buyer doesn't have control over his land as someone else still owns it.

That would never happen. In towns where the huge majority of houses are leasehold nobody panics about leasehold. Why would I worry about a nominal annual payment on a new house that I would be paying if I bought a non new build house?

[S11Steve]

I've no doubt the initial freeholder of our house was a genuine and open organisation, and many new builds will also have reasonable freeholders, but when the likes of Vincent Tchenguiz and his convoluted network of companies starts buying up huge swathes of freeholds at a later date, that is when the problems start - charges get added when there is no right for them to be, but people pay them because it is easier quicker and cheaper than contesting their legality.

Yes, the leaseholder should be given first refusal on any freehold sale, but what are the vast majority of people going to do with the notification letter that arrives with this offer? Pay a few grand to buy the freehold, or accept the change and think that they carry on paying £50 a year and bin the letter?

It's like private parking tickets - enough mugs just pay them without question, that a whole industry has grown up based on the subterfuge of enforceability.

[Gavia]

S11Steve said:

I've no doubt the initial freeholder of our house was a genuine and open organisation, and many new builds will also have reasonable freeholders, but when the likes of Vincent Tchenguiz and his convoluted network of companies starts buying up huge swathes of freeholds at a later date, that is when the problems start - charges get added when there is no right for them to be, but people pay them because it is easier quicker and cheaper than contesting their legality.

Yes, the leaseholder should be given first refusal on any freehold sale, but what are the vast majority of people going to do with the notification letter that arrives with this offer? Pay a few grand to buy the freehold, or accept the change and think that they carry on paying £50 a year and bin the letter?

It's like private parking tickets - enough mugs just pay them without question, that a whole industry has grown up based on the subterfuge of enforceability.

My whole point is that all of the houses that I've been talking about, both new and old have 999 year leases with the cost defined at outset. Those figures can't be altered during the term of the lease.

[SystemParanoia]

but these businesses are making extra charges on the lease.

They're charging ridiculous admin fees for "permission" to do or change x, y or z

[S11Steve]

Gavia said:

My whole point is that all of the houses that I've been talking about, both new and old have 999 year leases with the cost defined at outset. Those figures can't be altered during the term of the lease.

I don't disagree, and that is only what most people see. What they take advantage of is the lack of lease knowledge, and the threats of forfeiture in order to collect "permission" fees which again can not rightfully be collected unless they are stated in the lease.

But if it is holding up the conveyancing in a long chain of buyers and sellers, or delaying the grant of planning permission, what is the leaseholder to do? Spend 3-6 months and a few grand in legal fees arguing via the leasehold tribunal, or just pay up and deal with it later?

I know what is lawfully right, but I also know what happens in reality.

Freeholders are just like an insurance policy - you do not know how good or bad it is until you come into conflict with them.

[Gavia]

SystemParanoia said:

but these businesses are making extra charges on the lease.

They're charging ridiculous admin fees for "permission" to do or change x, y or z

How many times? I have added garages, extended houses, replaced windows, soffits, fascias, rooves and so much more and not once have I asked for permission. There is no allowance in the lease for admin charges for asking for permission anyway.

Interestingly, the one hose that I own that is freehold (the one I live in, in a different area) has somehow also got provision for me to have to ask the original builders for permission to add any extensions.

There seems to be a desire on here to paint leasehold as the Devil incarnate. In every walk of life there will be some shysters, but the vast majority will be fine. This issue is being massively overplayed.

[SystemParanoia]

Gavia said:

SystemParanoia said:

but these businesses are making extra charges on the lease.

They're charging ridiculous admin fees for "permission" to do or change x, y or z

How many times? I have added garages, extended houses, replaced windows, soffits, fascias, rooves and so much more and not once have I asked for permission. There is no allowance in the lease for admin charges for asking for permission anyway.

Interestingly, the one hose that I own that is freehold (the one I live in, in a different area) has somehow also got provision for me to have to ask the original builders for permission to add any extensions.

There seems to be a desire on here to paint leasehold as the Devil incarnate. In every walk of life there will be some shysters, but the vast majority will be fine. This issue is being massively overplayed.

whilst i have distrust of leasehold, im not militant against it. nor does it affect me as i am a freeholder and before purchasing i refused to even consider leasehold.
But it seems after hearing what you say, and reading up on it some; that most may be as benguine as you state. To me its the risk of putting all your eggs into a sharks poison basket that is too high.

personally, when it comes to the biggest financial outlay i will ever commit to. I don't want any extra risk into the equation.

I.e .. I want to be the fox.. not the gingerbread man

Edited by SystemParanoia on Friday 17th February 12:35

[Gavia]

That's your call. I'm just saying that it's not all bad news. Given that most people buy using a mortgage, I think the lenders will have some considerable say if the freeholders try to be too brutal as well.

[S11Steve]

Gavia said:

How many times? I have added garages, extended houses, replaced windows, soffits, fascias, rooves and so much more and not once have I asked for permission. There is no allowance in the lease for admin charges for asking for permission anyway.

I hear what you are saying, but I'll give you the scenario that I encountered on a house purchase.

A previous owner has extended it slightly, altered some structural walls, added a conservatory, changed the windows. Basic stuff, and all within the legal confines of permitted development, building regs etc.
Our lease, written in 1961, states that any internal or external alterations need permission from the freeholder. Again, I don't have an issue with that in theory, and again the lease does not say that permission is chargeable.

However when we bought the house, the mortgage company wanted to know that the house was not at risk of forfeiture, therefore asked for proof of freeholder permission - and that is where things got messy and expensive for us. The mortgage company wouldn't lend against it without proof of permission, or an indemnity, our sellers refused to pay the indemnity as they hadn't made the alterations, and if we asked for retrospective permission then it would likely cost £5k per breach (based on our solicitors previous experience with Fairhold an EM Estates), and we did not have the time or funds to contest that.


So yes, you may well have extended your properties without problem so far, but when it comes time to sell them and your freeholder has changed hands, I honestly wish you better luck than we had with the matter.

As someone else said above, it is one of the biggest assets that you will ever own - why would you not want full and total control of it?

[Gavia]

Then you had a duff solicitor. It costs around £5 to buy an insurance policy to cover against the exact situation you've described. They are so cheap because there's rately an issue.

[S11Steve]

We've indemnified (quite cheaply) against some historic issues, but ended up paying for FH permission on some more pressing issues like replacing the leaking boiler and broken windows after we moved in.

I wasn't going to go through the arguments of permission to replace it via tribunal when the 30 year old boiler was condemned.

Each to their own though, but given the problems we had with conveyancing on a breached freehold, I wouldn't wish that on anyone, buyer or seller.

[untakenname]

Just seen this article which I thought was quite topical about leaseholders being charged £28k for maintenance and having a charging order applied to their houses to make them pay. http://www.dailyecho.co.uk/news/15099934.Residentsleft_suicidal__as_landlord_plans_to_charge_them_27_000_each_for_maintenance/

[SystemParanoia]

untakenname said:

Just seen this article which I thought was quite topical about leaseholders being charged £28k for maintenance and having a charging order applied to their houses to make them pay. http://www.dailyecho.co.uk/news/15099934.Residents...

Fixed link

edit :

hmm.. cant fix it..

heres google search link

https://www.google.co.uk/search?q=Residentsleft_su...

Edited by SystemParanoia on Friday 17th February 15:34

[Gavia]

SystemParanoia said:

untakenname said:

Just seen this article which I thought was quite topical about leaseholders being charged £28k for maintenance and having a charging order applied to their houses to make them pay. http://www.dailyecho.co.uk/news/15099934.Residents...

Fixed link

edit :

hmm.. cant fix it..

heres google search link

https://www.google.co.uk/search?q=Residentsleft_su...

Edited by SystemParanoia on Friday 17th February 15:34

And once again, I'll repeat myself. The issue here is with the management company not the freeholder.

[S11Steve]

Gavia said:

And once again, I'll repeat myself. The issue here is with the management company not the freeholder.

Two cheeks of the same arse though? One wouldn't, or couldn't, operate or make demands without the consent of other surely?
Either way, it's not instilling confidence in those of us already averse to leasehold properties!

[Gavia]

S11Steve said:

Two cheeks of the same arse though? One wouldn't, or couldn't, operate or make demands without the consent of other surely?
Either way, it's not instilling confidence in those of us already averse to leasehold properties!

No it's not.

With a leasehold property you pay ground rent to the freeholder. This covers the rent for building on the freeholder's land. If it's just a normal house on a normal council owned road, then thats it, despite the fur ore on here, there is little a freeholder can do to enforce the terms lease in real terms. I've given a great example of that with one of the clauses in a terraced house that I own. On a lot of the others you're not allowed a commercial vehicle on the driveway or estate after darkness. Guess what? There are dozens of houses with vans on the estate. We're not allowed sky dishes on the front of our houses, guess what, we've all got them. There is nothing that the leaseholder can do to enforce those terms. Absolutely nothing at all.

If it's a flat or in a communal area then you may well pay a service charge on top. That is where the silly costs can be applied.

Interestingly you can all have freehold properties in a property that has a communal area, for example a gated community. You will stay pay a service charge and youncould still face huge bills in that scenario

I'm not sure how many times I can say the same thing and have it roundly ignored.

[Fastpedeller]

Gavia said:

I'm not sure how many times I can say the same thing and have it roundly ignored.

Me too - I'm giving up on this. If buyers can't see it then (unfortunately) they can't be helped by those who have seen the bad results of buying a leasehold property.

Edited by Fastpedeller on Friday 17th February 22:42

[matjk]

Gavia has a bonner for lease holds, clearly ! Best cast scenario is you don't have any problems like him , but thousands do, either that or thousands of people take to the net to slag them off!
What's the point of them anyway on a house ?? Imho anyone buyin a new house on lease hold needs their head looking at! That's my opinion based on my experience and no amount of someone telling me they haven had any problems ain't going to change that

Just out of interest if you could swap for freehold foc , would you take it?

[Gavia]

matjk said:

Gavia has a bonner for lease holds, clearly ! Best cast scenario is you don't have any problems like him , but thousands do, either that or thousands of people take to the net to slag them off!
What's the point of them anyway on a house ?? Imho anyone buyin a new house on lease hold needs their head looking at! That's my opinion based on my experience and no amount of someone telling me they haven had any problems ain't going to change that

Just out of interest if you could swap for freehold foc , would you take it?

I don't have a boner for leasehold I'm simply saying that 100,000s of people don't have a problem.

I really doubt that 1000s have problems too. The issues seem to be limited to a few individuals.

[shep1001]

Gavia said:

Why would a house have a service charge, other than if it's in private grounds with a private road as part of the development.

It was on a private community & I was OK with the charge for grounds maintenance it was the fact the property was lease hold not free hold and the lack of forthcoming detail about the significant charges & mechanism for annual increases that made me run.

The st has hit the fan near us on another development about the leaseholds, the solicitor our neighbour approached refused their business as their new build purchase was a lease hold and they were too busy sorting out the mess on the development next door to them as many of the residents used them as solicitors for their purchases.

Edited by shep1001 on Saturday 18th February 20:11