Has anyone bought their freehold?
My shop is leasehold, I pay 57p every 6 months and the bill always includes a letter reminding me that if I want to break wind, I need to ask them first and enclose a cheque for £120 for which they will check the lease and advise whether I am permitted to do so.
So i'd like to buy the lease at least on the shop. Has anyone done this and if so how was the process and what did it cost?
Value approx 70k, 850 yrs remaining on the lease.
TIA.
If you are going to be there the full term it is a lifetime's investment or 10.
And is at least the paperwork cost of actually purchasing the lease included in the £120?
I have a sneaky feeling that this is one of those things that with a little bit of research and checking of details you can DIY without much difficulty.
Solicitors like to project the image it's difficult or full of traps that you must employ and "expert". When it reality it's money for old rope.
Start here:
except that when you buy a lease you are required to pay the selling party' solicitors bill (subject to a test of reasonableness) and they don't need to reciprocate in this diy approach
Having said that IIRC there is no statutory "right to buy" the lease of a business property, if the freeholder doesn't want to sell it, you are snookered
tim
and then come back, because the property is neither a flat nor a house :-(
tim
I think the £120 is for just asking if he can paint the back door blood red etc. The lease is likely to cost 10s of thousands.
Someone's awake :)
Also not clear to me if the OP holds a lease on the *whole* of the property. If not, buying the freehold of the whole[1] means ending up on other end of the process, whereupon £120 for dealing with letters asking for agreement to drill holes through the wall to install a thingummy-whatsit might seem scant recompense for the duties of being a lessor.
[1] I'm assuming this is in England
Even at current low interest rates the ground rent income isn't worth more than a few hundred pounds. And with 850 years to go the reversion is worth nothing. So on the face of it the only value is in that ability to charge £120 per fart.
?That is the big problem. Presumably the shop is only part of the building, the freehold will the entire thing
ISTR that, for my house (similarly low rent and long lease), the owner of the freehold wanted £500 plus the legal costs.
£1.14/year and 850 years is £851.14 if anyone is still around to collect it...
Yep.
Or get what anybody is willing to pay...
not with a GR of pennies and a term of 800 years
Or possibly to gain control over maintenance and repairs (depending on how responsibility is split in the lease).
One of the snags is that the purchaser has to pay the freeloaders^H^H^H^H^H^H^Hholders legall costs too. SO irrespective of the value of the freehold, there's a baseline of c. £2k.
I get where the OP is coming from. We bought a leasehold house, and one of the covenants dictated which insurer we used. We could use a different one, but the lease insisted it be approved by the freeholder. AT *our* expense (£60). Which meant we paid over the odds for insurance for 10 years.
I also sympathise with the OP trying to get good advice - they will find (as has already happened) any mention of freehold purchase will be assumed to refer to flats.
We were trying to buy our freehold from the day we moved in. The roadblock we hit was calculating what it was *worth*. If you want to go down the proper route, it involves you - and the freeholder - arguing over what a surveyor says the property is worth as a starting point. (Guess who pays for the freeholders surveyor ????!!!!). So you are looking at having to spend some cash upfront.
This leaves a gap in the market for a class of "freehold consultants" who offer to handle the negotiations for you. We were contacted by one who claimed to be "in the area". Unfortunately the fact *he* came to *us* meant he could never pass the smell test, and we never used him, despite his helpfully reminding us of his existence.
Then one day - out of the blue - the doorbell rings. It was the freeholder asking if we were interested in buying the freehold. We chatted and a sum was agreed which seemed about right, so we got a solicitor and bought it. SWMBO had previously spoken with him on the phone, and I have to say he was as sleazy in person as she had described him.
I also will never shake the feeling the freehold consultant and freeholder were in collusion. Given the tortuous and opaque nature of the process, it's easy to envisage a scheme whereby chummy boy pretends to "negotiate" with the freeholder and get the grateful homeowner to cough up over the odds without going through (and paying for) the surveyor bunfight.
We bought the freehold of the first house we owned, if I recall it was 10x the ground rent which was £15 per annum at the time. Even with owning the freehold you may find restrictions in the form of covenants that limit the number of "farts" you are allowed. Our bungalow is freehold but the pre vious owner had to stump up a £400 "administration fee" to the origina l developer to add a conservatory due to the developer selling the property with restrictive covenants that gave him a say on what could or could not be built. Whilst these things are useful at the time of development and pre vent householders constructing horrendous structures affecting the value of the properties, 40 years on its just a "nice little earner" and of course is something that can be passed on to descendants who probably do not know what it is all about but brings in a little income for basically doing noth ing.
Richard
As the OP is talking about a shop none of the usual advice re residential property applies. In the common residential case the legislation giving rights to enfranchisement together with restrictions on what can be charged for 'management' make being the landlord more trouble than it's worth. A landlord is therefore generally willing to sell out and would rather come to a private arragement than be forced down the statutory route.
Usually valued at the NPV of than £1.14 and whatever you guess the long-term interest rate will be. So present value as an income stream less than £200
In cases like that you ignore the covenants and whait for someone to challenge it.
Did you ever take legal advice to see if that was enforceable?
I have a covenant that is ancient that says to build anything, I need to write to the interested party's estate and enclose a fee of one guinea (yes it's that old). My solicitor laughed and said "sod that" and "come back later and take out some indemnity insurance for £60 in case it ever shows up during a sale"
+1 - and take out indemnity insurance which is a one off tiny fee to make it bullet proof.
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