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The Lease Game
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Neighbours, 'owned' their flat (maisonette) for 30+ years, have a problem. Their lease, long when they bought the flat, is now looking short, and in estate agent's terms, too short to be able to sell the flat.
They approached their 'landlord' (I use inverted commas because like all landlords of this estate of maisonettes, the landlord does in fact do nothing - no involvement at all - all they do is own the lease) to extend their lease. 99 years? Of course, madam, that'll be £35,000.
Plus the chisellers costs, of about £5000.
Absolutely stuck, of course. Can't sell (except for a hugely deflated price due to the short lease), can't afford £40K-plus.
Capitalism at work; the market rules. Long live freedom.
A.
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Zacs, sometimes you make me smile.
It IS capitalism. The concept of 'owning' a bit of land, and then renting it out to others for varying periods, is at the heart of our economic system. It's not some accidental byproduct.
Most of the flats on this estate are 'worth' between £250 and £400 thousand. Overpriced of course, but that's London. Some areas are far worse.
In the 1980s when they bought their small flat, it was £25,000, with eighty years left on the lease (99 term). Now, 35 years on, there's only 45 years left, which means that the NEXT buyer would be in dead trouble in 25 or 30 years.
So every so often, the leaseholder (remember all he/she does is keep a bit of paper in a box) cops another largish sum of money for doing nothing, the other winners being, as usual, the lawyers.
What would their lease be worth if they paid up? Damn all. Their flat, on the other hand, would go from say £200 to £300K.
The whole rotten leaseholding system should be scrapped. (No, no benefit to us - we, along with our upstairs neighbours, bought the freehold about 30 years ago).
A
It IS capitalism. The concept of 'owning' a bit of land, and then renting it out to others for varying periods, is at the heart of our economic system. It's not some accidental byproduct.
Most of the flats on this estate are 'worth' between £250 and £400 thousand. Overpriced of course, but that's London. Some areas are far worse.
In the 1980s when they bought their small flat, it was £25,000, with eighty years left on the lease (99 term). Now, 35 years on, there's only 45 years left, which means that the NEXT buyer would be in dead trouble in 25 or 30 years.
So every so often, the leaseholder (remember all he/she does is keep a bit of paper in a box) cops another largish sum of money for doing nothing, the other winners being, as usual, the lawyers.
What would their lease be worth if they paid up? Damn all. Their flat, on the other hand, would go from say £200 to £300K.
The whole rotten leaseholding system should be scrapped. (No, no benefit to us - we, along with our upstairs neighbours, bought the freehold about 30 years ago).
A
Apologies, I see you did answer. It would seem to be a fait acompli of their own making im afraid.
As you admitted on another thread, Al ‘ I hold socialist principles (look the word up in a dictionary), and sometimes spend money in capitalist enterprises. ’
Hopefully you’re more ‘savvy’ than your neighbours.
As you admitted on another thread, Al ‘ I hold socialist principles (look the word up in a dictionary), and sometimes spend money in capitalist enterprises. ’
Hopefully you’re more ‘savvy’ than your neighbours.
Your neighbours can go to the Leasehold Tribunal.
See here.
https:/
See here.
https:/
// What would their lease be worth if they paid up? Damn all. Their flat, on the other hand, would go from say £200 to £300K.//
Then the value of the Lease would be £100k.
I would not personally call this being 'Absolutely stuck' they have a variety of alternatives. I would advise your friends, if they wish to sell, to go to an Estate Agents that specialise in Leasehold. This should not be difficult in London. It is possible to sell a property with an extension of the lease already in place, which will be paid by the buyer on Completion of the property sale. The seller can agree as a condition of the sale contract that he will serve the statutory notice requesting a lease extension, and then assign the benefit of this notice to the buyer on completion of the sale. This works both for the seller and the buyer. The seller will get more money for the flat than if it just had a short lease left, and the buyer will pay less than market value, but not a hugely deflated price.
The other alternatives are to just sell it how it is and buy elsewhere, they only have £25,000 invested in a property that is now worth minimum £200K, or cough up the extra cash to extend the Lease.
Then the value of the Lease would be £100k.
I would not personally call this being 'Absolutely stuck' they have a variety of alternatives. I would advise your friends, if they wish to sell, to go to an Estate Agents that specialise in Leasehold. This should not be difficult in London. It is possible to sell a property with an extension of the lease already in place, which will be paid by the buyer on Completion of the property sale. The seller can agree as a condition of the sale contract that he will serve the statutory notice requesting a lease extension, and then assign the benefit of this notice to the buyer on completion of the sale. This works both for the seller and the buyer. The seller will get more money for the flat than if it just had a short lease left, and the buyer will pay less than market value, but not a hugely deflated price.
The other alternatives are to just sell it how it is and buy elsewhere, they only have £25,000 invested in a property that is now worth minimum £200K, or cough up the extra cash to extend the Lease.
But the point is that they haven't GOT £40,000! If they had, then maybe it would be worth paying the rogues, but they haven't.
So what do they do?
Take ladybirder's advice? What would be Leasehold Tribunal actually DO for them?
To Tora3 etc., who think they've got me banged to rights. You haven't. I never denied having money (although our one 12-year-old car, no holidays since 1988, no alcohol for 18 years, and so on) might have contributed to our 'wealth' a little), nor spending it (what do you expect me to do, pop across to some godforsaken dump like North Korea or New York to spend it?)
So what do they do?
Take ladybirder's advice? What would be Leasehold Tribunal actually DO for them?
To Tora3 etc., who think they've got me banged to rights. You haven't. I never denied having money (although our one 12-year-old car, no holidays since 1988, no alcohol for 18 years, and so on) might have contributed to our 'wealth' a little), nor spending it (what do you expect me to do, pop across to some godforsaken dump like North Korea or New York to spend it?)
