Leasehold - 56 years left - royally screwed by solicitor - just want to cry

(69 Posts)
TheToysAreALIVEITellThee Tue 14-May-13 12:46:07

sad

Bought our first and current home 7 years ago. Was told by the solicitor that it was Leasehold with 63 years left but not informed what the implications of this were, just that it could mean we'd have a problem if we wanted to sell in the near future and she would advise that we either extend the lease or purchase the freehold when we can - great. I was young, excited that our offer had been accepted and we'd be moving into our dream home and trusted that the solicitor knew their job.

Fast forward 7 years and 2 DC later and finally my head is out of my arse to start looking into buying the freehold.

I feel sick, have read that it can cost tens of thousands of pounds, extending the lease can be just as costly, and if we just let the lease run out the land reverts back to the leaseholder and we can be forced to then pay them RENT for our own home that would have been fully paid off. So we need to buy it.

I cant stop worrying about this, we are due to go on our first holiday in 7 years this weekend (nothing special, just a few days in the UK with the kids) and finding out this has just completely soured it. I just want to curl up in a ball.

Has anyone else been in this situation or have any advice? I don't even know what the first step is. We are in negative equity (or very close) so no hope of releasing any funds. I just feel like there is no hope

Ilikethebreeze Thu 16-May-13 15:04:03

I have no idea if it is solicitors or estate agents or whoever on this thread. And from your pov,or reality, that the solicitor was not negligent.

But. I do think that a lot of professional people wrongly believe or assume that the person sitting in front of them knows a little of what they are getting into.
But sometimes they dont. And sometimes the client may well nod because they only partly understand but dont want to say that.

op, were you given any written information about it to read up afterwards?
note, I am just "an ordinary person in the street".

Thetoys - that's why leases are so cheap to extend when its just the land. Because the owner of the land will still get his £15 a year PLUS a bonus £1.5 - £2k from you wanting to extend it.

I am sure that if ever there was a case where a lease ran out and a landowner said 'I want to plant potatoes on this land now, get out of the house i'm going to demolish it', then it would make the national press.

My parents live in Bolton, a vast area on one side of town - with thousands of terraced houses on it, are on long leases from a lady something-or-other. Mums is on a 999 year lease, but the owner is getting a ground rent every year from thousands and thousands of homeowners. Its totally different from a lease on a block of flats where the leasehold actually refers to part of the bricks and mortar that make up your home.

cestlavielife Thu 16-May-13 14:07:48

get everything in writing. it sounds very cheap for leasehold extension but might be specific circumstances.

crazyhead Thu 16-May-13 09:15:06

Did read the last messages. You are sorted!

crazyhead Thu 16-May-13 09:10:45

Purely out of decency, a more vigilant/thoughtful solicitor might have thought to spell out the lease issue more clearly, but I doubt they were negligent, even if you didn't pay less. There's nothing wrong with buying a short lease, it is just that as a buyer, you'd negotiate to what you felt was a fair price. A solicitor has no expertise on that - value is a slippery pig even for estate agents and valuers!

The only person in the process looking at value (and on the bank's behalf, not yours) would have been the mortgage valuer, who would have taken the lease into account.

The reality is that this is seven years ago which completely skews the financial picture. In my part of London, property has gone up 50% since then, wiping the lease impact in financial terms, whereas in others it has dropped.

By all means post on legal, but I would get on with finding out what the costs of extending or freehold are, and looking at ways you might be able to meet them. Leaving it any longer is a really bad idea. It is completely galling but you may need to take the view that you just have to make the best of this.

TheToysAreALIVEITellThee Wed 15-May-13 12:39:48

Flibberty - YES! Its just the land we are leasing, ground rent is £15 per year so not a huge amount. Its a housing association (house is ex council) that own the lease so maybe thats why it would be so cheap compared to others??

Why are people still going on about blocks of flats when the op has stated that its a semi detached house, on which the lease is probably only for the land the house is built on.
That's what we pay for in my area. I have a 999 year lease (with 840 years left to run grin) for the land ONLY. I pay 37p a year ground rent to the leaseholder. My previous 3 houses in different parts of this county have all been on the same basis. Buy the house, rent the piece of land its on, on a 999 year lease.
We own the building. Just not the very small bit of land (terraced house) it is built on.
Hence Mil was able to extend her lease for a very long period of time, for a payment of about £2k, because the lease is only for the land, and on top of the £2k, the leaseholder collects a couple of hundred pounds a year ground rent on that particular property.

noddyholder Wed 15-May-13 11:03:24

It will cost several £1000 and asa its under 80 years there will be the marriage value to consider which is the difference between its value before and after the extension. You need to tackle this head on don't wait!

Bowlersarm Wed 15-May-13 10:59:19

Toys this might make you feel better. We bought a leasehold house in the past. To be fair we did buy it very cheaply because it was leasehold and knew there was money to be made on it. I couldn't remember how much we paid for the freehold (which was owned by 'the church'-i assume CofE) and just asked DH-he said £200,000 shock shock. It was in a rising market but still!

TheToysAreALIVEITellThee Wed 15-May-13 10:49:31

I will bowlers, going to try and enjoy my little holiday and get on it as soon as were back. Have left a scathing review about our first solicitor which has made me feel a bit better aswell, hopefully save some other poor sods from using them.

Its not a person that owns the freehold....it may well be a company that owns it toys, but there will be a person that owns the company, who will want a certain price for extension/freehold.

Bowlersarm Wed 15-May-13 10:43:42

I would say that sounds an incredibly reasonable price for the freehold. I would sort it out promptly if I were you. Very rare to have a leasehold house so convert it to freehold whilst you have the opportunity.

orangepudding Wed 15-May-13 10:40:15

As the bank gave you a 100% mortgage it's unlikely you over paid for the house. I am however surprised they lent you all the money with such a short lease.

We sold a flat with 80 something years left on the lease and were told by EAs that a couple of years less left on it would make it almost imposible to sell as banks wouldn't mortgage it.

TheToysAreALIVEITellThee Wed 15-May-13 10:36:03

It's not a person who owns the freehold so its just a nominal fee to buy it. 1.5 - 2k is the estimate all in. She said its a very easy process as long as I use a decent firm ie. Not the one we used to buy the house! In her experience it only gets more expensive if my solicitor doesn't know their stuff, she's also sent me a list of solicitors she's had recent dealings with who were good.

She was really surprised when I told her I heard they can cost thousands.

monkeychambers Wed 15-May-13 10:00:06

We had to renew ours on our last proporty before we could sell it.

As lalalong said you will have to pay the f/holders fees & we had to pay for a valuation for the free holder and we also had a valuation of our own done and then agreed a price inbetween the two.

lalalonglegs Wed 15-May-13 09:41:51

£1500-2000 sounds very low. Get something in writing quickly. Remember you also have to psy all yhe f/holder's costs plus your own solicitor and Land Registry fees. I don't want yo alarm you but even if that is the correct price, there will be other expenses on top.

GuinevereOfTheRoyalCourt Wed 15-May-13 09:30:46

Reading this thread makes me breathe a massive sigh of relief. I bought my first flat thinking it had 91yrs left on the lease (that's what it said in the estate agent details.) All fine until I had to rush to the conveyancer's office at a moment's notice to sign contracts with the threat that it would all fall through if I didn't sign that day. Finally presented with the paperwork, I found out that the lease was "79yrs"! I remembered being concerned but the conveyancer assured me that it was fine and didn't even mention that it could be a problem or that I should look to renew as soon as I could. So under pressure I signed and promptly forgot about it.

Thankfully, I sold three years later without any problem. I did get a query about whether I'd looked into renewing the lease but that was it.

It's only now that I realise what a lucky escape I had.

LandRegistryRep Wed 15-May-13 09:28:10

MSE cna be a useful source of information and personal experiences in much the same way as Mumsnet.
You may like to take a look at www.lease-advice.org/ as well as this is the 'go to site' for help and advice whether you want to extend your lease or buy the freehold

Noseynoonoo Tue 14-May-13 23:02:04

Similar happened to me on my first flat. It had I think about 77 years on it. Solicitor said I could extend the lease on it for a few hundred. I didn't realise the significance and that the fee could increase. Fast forward 6 years and a 71 year lease. By that point the fee to extend was about £19k. I would have extended at the outset if she had explained that the fee would increase so substantially. Sounds like you've been lucky.

What area of the country are you in? We are in the NW where houses come with 999 year leases which from previous mumsnet threads seems to be thought of as unusual in other areas where leases are only on flats.

Mil had a huge house in an affluent suburb of south Manchester. 10 years ago she was exactly in your situation, they'd been in the house 20 years and when they came to sell found it only had 30 years left on a 99 yr lease, which made the house practically unsaleable. I think they bought the freehold for about £2k and sold the house for £450k.

On purchase their solicitor didn't even mention the short lease so you can imagine their shock when it showed up on a potential buyers searches.

Cheeks4970 Tue 14-May-13 22:06:42

hi toys, I hate to stress you out but I work for a valuation surveyor and with a lease as short as yours, there is no way it will only be £1,500 - £2,000 to extend it.

You seriously need to speak to a professional chartered surveyor who can recommend a solicitor who specialises in this. Trust me, there are so many obstacles and you certainly do not want to be ill-advised with such a short lease.

You can either do it outside the provisions of the Leasehold Reform Housing & Urban Development Act 1993 - this is usually done by agreement directly with the freeholder but can often mean that you don't get as good a deal (new lease not as long and ground rent higher etc) as you would if you did it 'under the Act' where the statute dictates what you are entitled to BUT you have to pay your freeholder's legal and surveyor costs as well as your own - which the fees themselves would amount to probably around £2,000!

Also, it will usually not cost you much more to buy the freehold but you need 50% of the occupants of your building to do it with you. It is seriously worth considering in your case.

Please get professional advice - your freeholder will try to get as much out of you as they can! And please don't let the lease get shorter and shorter - the amount you will pay increases at an increasing rate due to the calculation method that is used - as house prices go up and your lease shortens.

Good luck!

GrandPoohBah Tue 14-May-13 22:00:17

That's fantastic news, you may have fallen on your feet there!

MrsBungle Tue 14-May-13 15:40:02

Good news. £2k is a lot easier to do than tens of thousands!

TheToysAreALIVEITellThee Tue 14-May-13 15:35:37

I cried on the phone, she was lovely about it blush

noisytoys Tue 14-May-13 15:34:57

That's great news smile hope it doesn't take too long to sort out

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