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AIBU?

Share your dilemmas and get honest opinions from other Mumsnetters.

To think it's wrong that a flat can be confiscated without compensation

55 replies

DisconcertedAndRetired · 26/07/2015 08:43

If you "own" a flat in England it will be leasehold. The lease will have various obligations, such as you have to pay the ground rent and management charges, not cause a nuisance, maintain certain things, etc. Apparently if you do not comply with the terms of the lease, the lease can be cancelled. That's your property gone, forever, possible hundreds of thousand of pounds down the toilet, no compensation.

In the case I'm about to link to, apparently a lady didn't pay £600 in ground rent, and lost a £100,000 flat.

www.bailii.org/ew/cases/EWHC/QB/2013/2304.html

(I haven't read the details myself, I'm going by a summary elsewhere as to what happened.)

I would have thought that if a lease is cancelled and a flat sold off, that any money left over after any actual debt and legal costs are paid should be returned to the former owner. But apparently that's not the case.

Among other things, the lease on my flat says no pets allowed, no laundry to be visible through the windows. So if the freeholder notices a goldfish in a bowl when they look through the window, or a sock hanging on an air-dryer, does that mean several hundred thousand pounds down the drain, and a nice profit for them?

I don't have in issue with leases being cancelled, as a last resort, my issue is purely that the freeholder should not get any reward other than money owed and legal costs recovered, and an undesirable lease-holder evicted.

The lady in that case claimed that she didn't know about the court proceedings till after her flat had been taken off her. She lived elsewhere so didn't get notice that was served. I don't care about the truth or otherwise of any of that: the bottom line is that the best part of £100,000 should have been returned to her, whatever (if anything) she did wrong. But the law does not require that.

OP posts:
2rebecca · 26/07/2015 15:00

Agree reading it it sounds like it was one of many properties she had. If you do buy to let then you should read the documents about your properties. She maybe wasn't supposed to be subletting. Why is someone posting about a 2 year old court case?

LazyLouLou · 26/07/2015 15:02

In the OP, achieve

LazyLouLou · 26/07/2015 15:04

2rebecca I am assuming that OP could be the ex flat owner Smile

Yes, YABVVU, OP Grin

do11y · 10/10/2015 22:19

ThroughThickAndThin01 it is a common misconception that leasehold properties are substantially cheaper than freehold. Long leasehold properties (where the lease is longer than 80 years) are really only very marginally cheaper - and that is a consequence of the buoyant housing market and new buyers not really understanding the differences between leasehold and freehold. Of course if lease fall below 80 years then the property may be seen as cheaper but ultimately the buyer will have to extend the lease at some point... which inevitably means they fork out that cash anyway. Buying a property with a short lease (unless you have no intention of increasing the lease - there may be many legitimate reasons for someone to want to do this) is just a waste of time and money in my view.

do11y · 10/10/2015 22:28

Micah if you own an interest in the freehold (i.e.: a share of the freehold) then you effectively have two roles to play WRT your property. YOU WILL BE A LEASEHOLDER, and you will have a lease, BUT you WILL ALSO BE A FREEHOLDER whereby you will enjoy freedoms and entitlements not usually bestowed upon leaseholders. Having an interest in the freehold is a valuable asset because it means the freeholder has substantial rights and tangible decision-making responsibilities WRT the building. But you will also have a lease because ultimately all flats use leases to set out the rules and covenants relating to each dwelling.
You must also comply with the rules laid out in the lease, but ultimately as freeholder you have much more sway when there are disputes and decisions to be made.
I hope this makes sense.

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