Leasehold problem

[Jkla]

Hi all

I’m just wondering if anyone can offer any advice. We purchased a leasehold flat years ago as young naive first time buyers. We then became northern rock mortgage prisoners so were effectively trapped with them as our mortgage lender as we had no equity in the property. our mortgage was then sold on to nram who kept us on the variable rate and do not offer any new deals. We were advised we would not be able to remortgage without any equity so we’ve overpaid a substantial amount in interest rates in the last 12 or so years and had to stay with NRAM. We recently tried to remortgage the property as we now have a tiny bit of equity. Unfortunately we discovered the issue of there being a mere 52 years left on the leasehold which has now thrown a huge spanner in the works. When we purchased the flat it had 66 years on the lease (I know this now as have looked through paperwork) which obviously meant nothing to us at the time and the solicitor never flagged that this would become a serious issue. As first time buyers we were completely unaware of leasehold/freehold and back in 2006 shows like homes under the hammer (that clearly evidence the pitfalls of leases under 80years) weren’t really showing on tv and sharing this sort of info to us as an audience. I appreciate we got ourselves into this mess and we we had a duty to do our own research but my question is should the solicitor not have mentioned this leasehold issue to us if he was acting in our best interests when it is now such a huge problem? I’ve had an approx quote of minimum £11000 plus legal costs to extend the lease in order to remortgage the flat and we just can’t afford that. It feels like we’re completely trapped and before anyone reminds me it’s our own fault I’m well aware of that but I feel that a solicitor who we engaged and paid a fee for should surely have advised us this could become a major issue that would cost us a huge amount of money. Did the solicitor not have a duty to act in our best interests under the principles of the SRA and surely it was in our best interests to advise us about the issues with the lease?

I should also add that our seller advised us to use this particular solicitor so not only am I wondering why we didn’t research leases but also why the seller suggested this solicitor in particular.

Thanks in advance
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I am surprised you got a mortgage on a L/H with less than 70 years left to run. I would go back and query with the solicitors why it was not flagged up when you first brought the property.

You need to pick this up with the solicitor you instructed. In my experience, clients are advised in their report on title. But in the haste to purchase they don’t concern themselves with what they think are trivial details until like now, it becomes an issue.

Also £1100 for a lease extension is a total bargain.

@TriangleBingoBongo it’s £11000 not £1100

Yes it should have been flagged up to you. Request your complete file from the solicitor including attendance notes. You are entitled to a copy. See if there is any note on file saying the matter was discussed. You should also make a complaint to nram using their procedure. When they throw it out go to the financial ombudsman on the grounds you have been treated unfairly.

OP, this is a great website for leasehold information. There may other things you’re unaware of so might be worth checking if there’s anything else you’ll have to pay for.

This will take you to the leasehold extension calculator www.lease-advice.org/advice-guide/lease-extension-valuation/

Yes, it definitely should have been flagged up. I’m surprised you got a mortgage in the first place, unless your lender wasn’t told...

Not gonna lie though £11,000 is also a steal. Mine was £30,000 to extend from 64 years. It’s a bit crap that they didn’t highlight it though but it is sort of a buyer’s responsibility IMO to do some research about the difference between leasehold and freehold and what the implications are. Would have been nice if they’d mentioned it though.

11k is a bargain - mine cost 50k including my costs and freeholders costs.

But your solicitor should have warned you. You might be able to make a claim against them for negligence. Do you have any legal expenses policies attached to your insurance policies? If so, might be worth seeing if they can cover investigating for you