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

[TheToysAreALIVEITellThee]

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

But that's what a leashold is. It's a long-term (one would hope) rental agreement.

I don't have direct experience, but there is hope surely, you've got 56 years to get this money together!

It sounds like you might have been mis-advised by your solicitor, so possibly post this in legal?

Also you're read it can cost tens of thousands - is this just general advice? You need to get specific advice, how much will it cost to buy yours, it may be much cheaper.

I'm sorry you're upset, but I'm not sure you can blame the solicitor. The solicitor said it may cause problems when trying to sell (which is solicitor-speak for 'this house has issues, possibly avoid it'), and you can indeed extend the lease or buy the freehold, so s/he wasn't wrong there either. Perhaps they ought to have found out for you what buying the freehold would've cost you, but equally, you could have done this research yourself. In fact, it's probably the difference between the cost of a similar freehold property and the price you paid for your - leasehold - property. The reason it was cheaper to buy than similar properties (I assume) is because it is a leasehold.

Don't despair. Start to save up now to buy. Alternatively, if your financial situation allows it, could you look into the possibility of extending your mortgage (perhaps once the financial climate improves), as a way of buying out the freehold. Since this would automatically raise the value of your property, your mortgage lender may agree to it. I don't know whether this would be possible, however.

from what Ive read as each year passes it will get even more expensive, something to do with the current value of the house with the short lease, and the potential value the freehold would add to it.

Ive considered just leaving it and hoping something will come up in the next 56 years but what if it just gets dearer and dearer? The house will be the only thing we will have to leave our children and the thought that it wont even belong to us after we've paid off the mortgage is more than heartbreaking

it wasnt cheaper to buy because of the short lease btw, I do feel the solicitor advised me very badly but as its 7 years after the event there isnt much I can do apart from moan about them.

usuallyy a few hundred, not thousands!
Extending terms not horrifically expensive either, honestly.
Unless you're in Chelsea, I wouldn't worry!

that's not my experience, Avril. Don't want to alarm the OP further but the case I know of they are paying around £40k.

I don't really see how the solicitor was at fault, tbh, I think you could have been expected to do some research, after all she warned you that there might be a problem when you came to sell.

Definitely not on chelsea. It's a shithole, but its my shithole. Or not

But arabella surely that what the solicitor was paid for?

OK, OP, but from your message it is not clear how the solicitor misadvised you. S/he said it would be difficult to sell (big red flag) and that, if you wanted, you could buy the leasehold and freehold in the future. This was and is true. As I said, the only issue might've been that - had any of you bothered to find out how much the freehold would cost - the solicitor might have suggested that together with the sale-price it was too expensive. Perhaps the solicitor assumed that you had already considered the issues.

I am very surprised that the property wasn't cheaper than its freehold equivalents. I can generally pick out the leaseholds from the freeholds in my area as the price difference between them is dramatic.

But the fact is that we instruct solicitors to act on our behalf. They do not instruct us. Feeling peeved at the solicitor now is wasted energy. Focus on how you can get what you want.

Most mortgage companies won't agree a mortgage on a short-lease property, which is why you might have problems selling if you don't extend the lease (or buy the freehold).

But I thought a law was passed a few years ago which meant that the freehold could not be sold at an unfair/unreasonable amount?

You need to contact the leasholder and find out your options (extend or buy the freehold), then speak to a solicitor.

Don't despair, it is fixable, and may not cost as much as you fear.

I don't see how you've been misadvised here.

I would look into buying the freehold, see here for info
link

Impossible to guess at what it might cost, it will vary massively depending on the value of your flat (it's a horribly complicated calculation). It will get more expensive as the lease gets shorter though, so don't stick your head in the sand about it. I don't think the solicitor advised you badly, more likely assumed you had a better understanding of the situation than you did.

There's a company that specialises in this, leasehold doctors. We have used them in the past and they were great. Give them a call, iirc they will give you a rough estimate of what an extension or freehold purchase should cost. This will be ultimately be subject to agreement between you and the freeholder and if freeholder is unreasonable then you may have to take/threaten them with a tribunal.

Purchase of freehold would have to be in conjunction with other leaseholders, this makes it more complicated and admin heavy, but is the best option and shouldn't be much more expensive than a lease extension.

A quick google search says

www.moneysavingexpert.com/mortgages/extend-your-lease

"If your lease is under 70 years, mortgage rates may at best increase. It will be virtually unmortgageable under 60, so you will struggle to remortgage. "

So basically you had 3 years to sort it out, and didn't.

Solicitor didn't screw you, come on you bought a house on a lease, that's clear, that if you did nothing, eventually your house would be worthless. Surely obvious?

The solicitor raised it with you. She doesn't make decisions for you. She gave you a red flag, you decided that it wasn't an important one for you.

This thread has reminded me to email my solicitor about my own leasehold issues!

Nomen - that wasnt a red flag to me to be honest, we had no intention of selling "in the near future" as she said and I said that to her and she just breezily said about the extension or purchase. We were first time buyers, young, naive, trusted that the solicitor would advise us properly. Why didnt she tell us properly what the potential issue could be? Give us some options? Advise us to offer less than they said? make an extension of the lease a condition of the sale?

Honestly there was no difference in prices for freehold properties at the time.

Do you currently pay groundrent? We lived in a leasehold property and paid somehting like £4 every six months to the leaseholder. The difficulty will come of course when you try and sell the house as no-one else will want the short lease either. I guess the only route is to employ the services of a conveyancing solicitor local to the area who can advise you on the likely costs. You could do this at any time before you sell so I wouldnt worry about it right now as frankly you are not in a financial situation to do anything about it anyway. Enjoy that well deserved holiday, do some research and make a long term plan.

the property will have been cheaper than others of the same size due to the length of lease. you have not lot anything. yet.

you have not been done over but you need to make sure you handle your short lease correctly.

you need legal advice asap.

The solicitor's role is to advise you of the legal implications of your purchase, not the commercial ones. The buyer decides whether or not it is a bad bargain. The solicitor makes sure there is good title and no one has any imminent plans to build a motorway through it and so on.

You need to post in legal pronto, but are you sure the term "marriage value" was never mentioned at any point? I don't know the detail, but basically this kicks in around the 80 year mark and potentially makes the lease much more expensive to renew thereafter - so you certainly should have got a better deal when you bought at 63 years, even compared to other leasehold properties, never mind freehold!

thanks for the posts with advice btw. Gives me a starting point

I maintain the solicitor gave me appalling advice, I was paying an expert a lot of money to assist with the house purchase and to raise issues with me. A one sentence "might cause issues if you want to sell in the near future" is not really advice, when I said that we wouldnt want to sell in the near future she should have explained the implications further. But as I say, 7 years after the event there isnt anything I can do about it except whinge.

Anyway, Im waiting on a call back from the company that manages the lease so i can at least find out the next step

In any event, given you bought 7 years ago you'd probably be out of time to bring a negligence claim against the solicitor, even if you had been badly advised.

the property was NOT cheaper.

I only know the term Marriage Value after my recent googling. The two lines in my OP are all the solicitor said about the leasehold. Literally

The Leasehold Reform Act has made huge improvements to your rights as a leaseholder and greatly increased the scope of what can be done to get yourself out of this situation.

Are there several flats in the building or is a conversion with just two or three flats?

What you need to do is appoint a solicitor who specialises in leasehold property (not a standard conveyancing solicitor).

But a) how did you get a mortgage and b) I just have enormous difficulty in believing that this property wasn't cheap when you bought it because of the short lease.