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

Mintyy Tue 14-May-13 13:18:43

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.

Leasehold doctors will give you an estimate free and over the phone if you call them. The management company may tell you procedure but are unlikely to give you an idea of cost for purchase or extension.

fubbsy Tue 14-May-13 13:19:59

Another good source of information is the Leasehold Advisory Service. They have a helpline 020 7383 9800. IMO they would be better placed to advise you of your next steps than the management company. They should also be able to give you an idea of how much it might cost to either extend the lease or buy the freehold.

TheToysAreALIVEITellThee Tue 14-May-13 13:19:59

Montyy - its a semi detached house.

Mortgage company just gave us a 100% mortgage.

I know people are having difficulty believing it wasnt cheaper because of the lease, but it really wasnt, trust me. otherwise THAt would have been my red flag.

bumpyboo Tue 14-May-13 13:20:24

Okay. I have gone through the process of buying the freehold on a leasehold property.
First thing you need to do is contact the leasehold advisory service. Its free and they give excellent advise in my opinion.
You don't say whether you live in a block of flats or a house? This will be important as if it is flats you will need to join with other leaseholders if you want to collectively buy the freehold.
If you can't buy the freehold you have the right to extend the lease. Obviously I don't know your circumstances but only in very few cases would that cost tens of thousands.
Have you got a copy of your lease?

I don't know where you are OP but we used these solicitors to purchase our freehold but we had notorious rip off merchants as our freeholder, was a nightmare. If you need a specialist solicitor you could give them a call...

Jaffe Porter Crossick

FasterStronger Tue 14-May-13 13:24:32

the property was NOT cheaper.

then I am afraid you have lost out as you have paid an excessive price at the top of the market.

but you can learn from this.

TheToysAreALIVEITellThee Tue 14-May-13 13:26:26

I now know that faster sad

daytoday Tue 14-May-13 13:27:22

If you don't want to buy the freehold - extend the lease.

How expensive it is all depends on who owns the freehold? Who does?

Yes you are probably looking at over 10K.

FasterStronger Tue 14-May-13 13:28:43

you really need to see a lawyer - I don't know the size of the problem but it might feel better if you have the facts.

and the free advice service mentioned up thread.

good luck with getting it sorted.

NomenOmen Tue 14-May-13 13:28:57

Trouble is, I don't think solicitors are employed to comment on the wisdom of a given transaction. They may comment on its legality, but not its wisdom. She told you what the issues were. If you didn't understand their significance, you could have asked her further about that. If you didn't, she must have assumed (wrongly) that it was because you wanted that house so much, and therefore were prepared to take the risk.

The amount of money you pay them is irrelevant, really. That's how much the law costs, regrettably.

Good luck sorting it out! smile

daytoday Tue 14-May-13 13:29:02

Find out who your freeholder is and google them. Its amazing what you can find out.

maggiethecat Tue 14-May-13 13:30:42

Solicitor was negligent if she did not spell out in very clear terms, other than referring to potential difficulty at sale, the implications of there being such a short reversionary period. You are also at fault as such a reference should have made you enquire further, euphoria of owning a home aside.
As other posters have said, it's strange that this would have passed a lender without recommendations.
LEASE is good - see their website. We bought our freehold ten years ago and it was straightforward.
Good luck!

woozlebear Tue 14-May-13 13:39:38

But the solicitor pointed out the problem, explained why it was a problem, and advised you what to do! I think a solicitor would (reasonably) assume a slightly higher level of knowledge in a house buyer. And you could always have asked someone, or done some reading. Ok, she didn't go above and beyond her duty, but if the survey found damp or subsidence, or the local search found a massive planning application next door would you expect her to list in graphic detail all the possible hypothetical consequences of that? House buying takes a lot of leg-work.

we can be forced to then pay them RENT for our own home that would have been fully paid off. This really isn't as unfair as it sounds like you feel it is. You would just have paid off a mortgage on a lease on the house, not the house itself. I get that it's an horrible situation if you weren't expecting it, but that's what leasehold is!

From the small amount I can remember about leasehold, once it gets past about 80 ish years, time is off the essence and it will only get more expensive, so it's good you're thinking about it. I seem to remember a few years ago a place costing £240k would have needed 15k to buy the leashold, but I'm sure it's v complex and variable.

noisytoys Tue 14-May-13 13:47:20

We extended our lease from 72 to 99 years because we couldn't afford the statutory 90 year extension in 2011. Including all fees it cost us about £6k and increased our ground rent to £200 a year. When we are in a better financial position we will do the 90 year extension and get a peppercorn ground rent

Really sorry to hear about your predicament. There are two things you can do: 1) agree with your landlord to extend the Lease (it is a possibility) or 2) try to buy the freehold.
DH and I did 2) on our flat in London (saves having to pay both for the lease extension and the freehold) it cost us £10K

GrandPoohBah Tue 14-May-13 13:51:56

When you buy a lease, you're buying the right to occupy the property for x no of years. You do not own the structure of the property or the ground it is built upon and you're confined by the terms of the lease.

I manage freehold block of flats for a living and it is astonishing the lack of knowledge of people who purchase flats - and property programmes on tv really don't help. As a leaseholder you have loads of rights but most people don't know enough to exercise them. It's not the solicitor's job to make sure you understand what you're buying, but there is certainly a lack of education and I don't know who should be responsible.

Op, speak to the leasehold advisory service, as advised above. They will be able to point you in the right direction, and also have fact sheets about lease extension.

TheToysAreALIVEITellThee Tue 14-May-13 15:26:13

just spoken to the person who represents the 'landlord'

She estimates it will cost about £1500 - £2000 in total, even with the short lease, providing I use a decent solicitor who specialises in this area. She asked who it was I used to buy initially, when I told her and said that I thought they advised me badly/not at all she said she knew of them and off the record that she "wouldnt touch them with a bargepole".

Am going to speak to the Leasehold advisory service aswell, but things certainly look a bit better than they did before <understatement>. Im also going to speak to the mortgage company to see if they would be willing to loan us some additional money given that it will add some, albeit small, value to the house. Might even be able to do a bit of decorating and finally finish off a few rooms in the house.

Thanks again for the advice smile. Am a bit calmer now.

MadBusLady Tue 14-May-13 15:31:03

Oh good news - that could have been a lot worse!

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

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

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

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

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

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

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

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

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!

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.

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