Leasehold issues

[Jkla]

Hi I’m just wondering if anyone can offer any advice. We purchased a leasehold flat years ago. 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 recently tried to remortgage as we now have a tiny bit of equity in the property. 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 but the solicitor never flagged that this would become a serious issue to us. As naive first time buyers we were completely unaware of this 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. I appreciate we had a duty to do our own research but my question is should the solicitor not have mentioned this issue to us if he was acting in our interests? It’s going to cost us over £11000 to extend the lease in order to remortgage the flat and we just can’t afford that.

Thanks in advance

The only fault with the solicitor is that they didn't explain to two young FTB what the short lease meant. I have sympathy for the OP.

@MissSueDenim. No one is saying a solicitor needs to be a fortune teller, but if they are doing conveyancing they should understand property law and advise clients of the pitfalls of a short lease. Again, that is partly why we pay them.

@whataboutbob Thankyou for your support. I think you understand where I am coming from!

@ruthieness I Definitely haven’t seen a document like that Or anything that mentions any difference in value due to the lease but will double check tomorow. Thankyou

@UserThenLotsOfNumbers I’ve looked into this this week and sent some emails. Thankyou- good luck with your lease extension I hope it’s straightforward for you

@WombatChocolate the reason I’m so defensive is because I came here looking for advice and some people talk to you like rubbish and revel in making you feel worse. I was actually not looking for anyone to blame. The reason I posted this question was because yesterday I spoke with a very experienced surveyor who specialises in lease extensions and as soon as I told him the situation he was astounded a solicitor allowed us to purchase the property without raising the issue of a short leasehold or explaining it to us at the time. He suggested that the solicitor should be held accountable and I could have a case for negligence as he had seen in the past. I was simply wondering what other people’s thoughts were on this situation before I get into all of that but clearly a lot of people just think I’m an Imbecile and solicitors who we pay a lot of money to act in our best interests do not actually need to do so. That’s fine. Everyone has a right to expect different things from a service and to have an opinion some people clearly just enjoy making others feel small. I personally expect a solicitor to act in my interests and warn me if something could be very problematic with a house purchase. Obviously have very high expectations.

Do you want to sell or remortgage?

Sadly 15 years ago we did not have a palm size device that we could research every detail of property buying morning noon or night. Also, like I said earlier- at the time we purchased there were no homebuying tv shows that most of us would now have seen advising us never to touch a leasehold with less than 80 years!!

OP you're making a shocking amount of bad excuses. You screwed up. You didn't do any research so just put your hand up and admit it and move on.

The internet existed 15 years ago. I take it a Google search was too much effort for you? And as for no TV shows about homebuying, as an example Location Location Location started way back in 2000.

Just admit that you were lazy and now it's come back to bite you. Then let people try and help you find a way out.

Did you never wonder why your flat was so cheap?

I bought a flat as a first time buyer back in 1996. There was information available back then about leases as I made sure my lease was at least 99 years (and the whole process was new to me, just like it was to you).

Better to stop dwelling on your mistakes and instead look into the feasibility of raising the capital to extend your lease or your position will only get worse.

@whataboutbob have you read my posts? I actually agree with you! My fortune teller comment was with regard to the economic downturn which is what caused the OP to become stuck in the position she is in now.

With regards to general / standard information, in my very first post to OP I said:

Read over your original paperwork & if you feel your solicitor did not act in your best interests & misled you or did not advise you correctly with the information that was known or foreseeable at the time then of course follow it up

In my post where I quoted you, I also said:

if OP is referring to general lease information (things like lease length, increasing costs regarding lease extensions etc) then the information should all be in the paperwork which is why I suggested OP review it & follow up if necessary.

OP is talking about taking action against the solicitor because they never flagged that this would become a serious issue. If it’s just a case of generally not being told what a short lease meant then that’s easy to clear up as it will either be in her paperwork or not which is why I’ve suggested she check it in two different posts now.

Anyway I’m going to bow out as I don’t want to derail OP’s thread anymore or be called anymore colourful names lol.

I avoided buying a leasehold property in the late 1970s, even back then it was common knowledge in any newspaper article on buying houses/flats that if buying leasehold it was advisable to ensure the lease left was 90-100 years or so in order to not lose value (renewing leaseholds in those days was less of a straightforward process)

Hi- I think your conveyencers were negligent if they did not refer to the length of the lease in the purchase report. However, I think you only have six years to take a case against them, which will be long expired now.

If you've got indemnity insurance for an absent landlord, who is charging you £11,000 to extend the lease?

Have you looked back at the paperwork to see what was said?

Often people say nothing was said verbally about things like leases, but when they look at all the mass of paperwork, they see something mentioned inside it, such as buyers needing to be aware of various potential issues with leases.

The reality is that people often don't fully read or fully absorb what is a said. They get excited about their purchase and don't do due diligence in terms of checking things or even reading the information they are given. Sometimes thry read it and do t fully understand it....but don't enquire further. Solicitors are of course careful not to put themselves in a position to be culpable. Sometimes they do, but often when people look at their paperwork, the issue was mentioned.

What about in your paperwork Op? You are clearly hoping you might bring a negligence claim....but the starting point would have to be the paperwork. And as others have said, rightly there has to be a time limit for these things and your purchase was very many years ago now. To be honest, you haven't been 22 for along time (not that age will ever be acceptable as an excuse) and had many years to look at your lease again, plus there has been a lot in the press over the last years about leases. The fact you have only recently got to grips with the implications is pretty surprising to be honest.

But again, blame isn't really relevant or helpful at this point. Your stage for making a case has passed and blaming them or yourself won't achieve much now....better to focus on dealing with the issue and finding a way to extend the lease - look forward, not back.

OP if you can at all, I’d advise biting the bullet now and extending. Otherwise you are left with a depreciating asset. It’s what I did and obviously I don’t regret it. WombatChocolate makes valid points.

If the freeholder is absent , who do you pay the leasehold fees to ? How will you extend it ? What do the others flats do ?

@HundredMilesAnHour Thanks for your input. our flat wasn’t cheap it was the same price as any other in the street- we paid £77000, they sold between 70 and 80k. That was the average valuation at the time, so no cheaper, actually at the higher end of the price bracket but thanks.

@pistpick we were told groundrent was £8 a year but as the freeholder was absent We didn’t have anyone to pay it to.

Okay , I would look at a solicitor that specialises in leasehold issues. The law society may have a list. Not sure what would happen if the freeholder couldn't be tracked down , it must have happened to others.

solicitors.lawsociety.org.uk/
search on here check the solicitor is expert in leasehold area & if your lucky you may find one who can give you advise as a one off or set hours expense - no matter what we say unless we are experts (& some people do have experience & frankly if you buy it is buyer beware - with solicitors its up to you to read information & raise a question - not. I am afraid the other way round & out of interest was this an on-line practise or did you do face to face?)

hoa.org.uk/services/ask-an-expert-2/ask-an-expert-i-am-buying-questions/extending-my-lease-when-i-cant-trace-the-landlord/

OK so you paid 77000 14 years ago.

So if you took a mortgage of 70k and it is now worth a max of 60k how much equity have you actually managed to put back in? It must be a decent chunk over 14 years?

How much mortgage is still outstanding etc?

I have a little experience in this area as my Dad bought a leasehold flat around 2003 and eventually had to extend the lease himself in order to sell it, there was no other way. Luckily the prices had increased though as the area had. With the extended lease how. Much would it be worth? Have you asked others near you and compared the sales on zoopla etc?

Further thinking about this and playing with a calculator in your situation you'd be better getting a loan to cover your lease extension costs and getting it done ASAP.

Then when you can remortgage you should be in a better monthly position with rates being so, so low right now. Better than the variable you've been stuck on.

Are there two of you applying? Ages? Incomes? Other debts and do you have children etc?

Have a look at a mortgage affordability calculator fill it in on the basis you're paying back a 16k loan each month too. Doable at all?

The longer you leave the lease reducing, the more expensive it will be to extend. I’d get this sorted now and then try and recoup your costs later. Get a leasehold specialist for this work. If you want to sell, you’ll have to do this, however, given your flat has a short lease, surely others in your block or area will have too and the added value of a long lease will be of value to any potential purchaser. With an absent freeholder, it sounds like the costs you’ve been quoted (which I assume are legal costs as how could an absent freeholder quote you the fee to extend if they can’t be found?) are reasonable.

The other thing you could do is get together with the other leaseholders and buy the freehold. Again, Lease Advice has solicitors who will advise you for free. You don't need to spend money researching your options. They also have a lot of downloadable leaflets on their website.

OP, I think you're getting a hard time from some posters here. We're in exactly the same situation as you - bought with a short lease in 2007, paid the going rate, wasn't warned by the conveyancing solicitor. We're neither stupid or naive, despite what some people might think.

Unfortunately we're now looking at £40k+ to extend the lease which we hope to do using the statutory route later this year using an inheritance. We have no mortgage now and no immediate plans to move but it would be nice to be able to if we want to.