Owning your own home

We dont pay a service charge to the freeholder currently (just ground rent and insurance). I don't think they would do any building maintenance anyway without charging us.

Seems like the best option to do it, seeing as I'll have to fork out a load to extend the lease too. I guess I want to be sure there's no possibility of getting f&ked over (with him knowing lots about property stuff and me very little).

I do venture south, did a kitchen in Peckham recently.

Bedside table 👍🏻 - fixing existing things isn’t really my game though.

How would we discuss what makes a great bedside table in a socially distanced manner? Ideally I'd like you to see the place to get an idea of the prevailing aesthetic - do you own a HazMat suit?

Is the freeholder up for selling it?

On the house price situation we put an offer in slightly over asking for a place in the NW (of the country, not London) at the weekend. It was rejected as there was a cash buyer who went a long way over the asking price.
EA said there had been 7 offers over the weekend, 5 of them over asking so not sure about this price drop. There isnt much stock on so prices seem to be staying high

2 leasehold maisonette flats in a semi detached house. I own the ground floor. The guy upstairs (an estate agent owner by day) has suggested we buy the freehold. I'm clear on the advantages, but what are the downsides to this?

There ARE downsides and Howard is right to point them out. But compared to the risk of some aggressive third party freeholder buying your freehold at auction and making your life a misery with jumped up charges? Minimal. Go in.

Collective enfranchisement?

Yeah it's difficult for them to hold on to it presuming it's 'normal' private residential housing in England.

Still need a carpenter? I can ask my mate

There are different valuation procedures for freeholds under CE vs market sale. You will probably find it is cheaper under the latter; ours was.

It was impossible for us to buy our freehold under CE. The main obstacle being the small flying freehold overhang of the house next door over our walkway. Not spotted by our lawyers, who charged us for their assessment, but noted by the valuation surveyor.

Yes please - is your mate good?

Yeah that's abnormal.

Also: what a ball ache

Indeed. Plus we have joint freeholders, one of them bankrupt, and the other incommunicado, living abroad, with a mortgage charge slapped on his portion of the freehold that exceeds the TOTAL value of the freehold itself.

We sought counsel's opinion on the flying freehold issue, and they pointed out that we had the right to exercise CE over the (empty) unencumbered freehold property next door. Unfortunately we couldn't afford it (and didn't want it anyway).

Funnily enough that was what I was going to suggest. Might be workable if you can find a white knight investor, but it's still likely to be expensive and a PITA.

Did you inherit this mess?

Who's the forum's go to carpenter these days? We need a small flight of steps (about 600mm high) leading out into garden.

PS I'm not a £40k kitchen guy so please don't embarrass me with sukiya daiku artisanal carpenters.

Edit: For this

1 Attachment

It all blew up a year or so after we moved in, starting with the bankruptcy. The lawyer that drafted the most recent set of leasehold agreements (not mine) is now in gaol, apparently!

I know the bloke who owns the neighbouring house. I couldn't bring myself to do it without his consent. We looked at ways of involving him, doing the CE and transferring the title back but the tax situation looked gnarly.

We are also currently in a chain.

We lowered our offer on the place we are buying following surveys due to unforseen works that need doing. It was accepted.

Our buyer reduced his offer by 10% due to housing market drops. We negotiated this down to under 2% as ultimately any market drop is currently speculation. He accepted this.

Make of that what you will!

Yes he’s pretty good I’m hoping to get him round my in laws to do work but with the lockdown that’s changed it a bit

He’s got an instagram I’ll dig out a handle

Will pm you once I get a reply from him

I'm still not sure about this. I can't see why the guy upstairs wants to do it, he said its a good time as the valuation will be low atm due to covid and he also doesn't want to "remember to pay the ground rent/extend the lease" (his lease is 125 years). Does he want to do it so its easier to extend his flat or something? Or is it just to add value for sale?

Tbh, I don't really trust the guy (he has builders in building a huge "shed" built during lockdown in his garden, one for the bastard neighbours thread) so I feel there could be hassle in the future if we're both freeholders. If I extend my lease through the formal route, my ground rent will be peppercorn rent (zero) so having thought about it I actually don't see that much advantage to being a freeholder?

You should do it. The danger is he becomes the freeholder and then you are fucked.

I'm still not sure about this. I can't see why the guy upstairs wants to do it, he said its a good time as the valuation will be low atm due to covid and he also doesn't want to "remember to pay the ground rent/extend the lease" (his lease is 125 years). Does he want to do it so its easier to extend his flat or something? Or is it just to add value for sale?

Tbh, I don't really trust the guy (he has builders in building a huge "shed" built during lockdown in his garden, one for the bastard neighbours thread) so I feel there could be hassle in the future if we're both freeholders. If I extend my lease through the formal route, my ground rent will be peppercorn rent (zero) so having thought about it I actually don't see that much advantage to being a freeholder?

I'll try to explain it a bit. There are three options here really.

The first is that you pass on it, and he can't afford to buy on his own. Fine. But if that freehold is up for sale, there's a decent chance that whoever owns it will just put it up for sale on the open market or at auction. And no-one who buys freeholds at auction has your best interests at heart. They will employ a managing agent, they will charge you for ground rent collection, they will enforce the covenants for the building, and you will pay a service charge over which you have no control unless you're prepared to learn a lot about the tribunal system. If you don't think this happens, google some of the companies which do it - Eagerstates, Assethold, Triplerose - and see what hapens to their house prices. That's your worst case.

The second best case is letting him buy on his own. In this situation, he becomes your freeholder - effectively your landlord, in law. If you want to make any alterations to the building, you need to ask his permission. If he elects to carry out major works, and your lease allows it, you need to pay him for them. If you don't, he can enact forfieture proceedings against you - you can be kicked out of your own flat. You also need to pay him for the privilege of extending your lease. And there's no standard formula for that. His lawyers will be able to demand more or less what they want, within certain limits. I had a short lease (65 years) which I extended last year; the total cost came to £31k including lawyers fees. I don't imagine he'll be able to charge you as much as that - I had to deal with marriage value which adds quite a bit on - but you're still talking significant money. And he'll certainly want to make at least some of the money he spent buying the freehold back from you or your subsequent tenants.

Now think about what happens if you go in with him. If you buy the freehold with him, you can both extend your lease for nothing - just the legal paperwork. He has the ability to do this too - you both win - because you're both co-owners. You both get equal votes in work to be done to the flat. You become co-inforcers of the lease (meaning that you can challenge the shed with the legal powers of the courts behind you!). You'll also add probably about 10% to the value of both flats, because those of us with aggressive or absent freeholders know how much of a nightmare that is. Look at 'share of freehold' flats on Zoopla and note how much nicer and more expensive they are. That's no coincidence.

If you don't trust this guy that's fine. You can insist on using your own lawyers - I'd recommend Mari Knowles or Amanda Gourlay, both excellent on these matters. But a freeholder is a position of strength. A leaseholder is a position of weakness.

Lol much more elegantly put than I managed, but absolutely correct.