Freehold

[tim...]

not with 99 year leases

The reversion is a valuable property not to be sold on lightly

tim

[dennis]

There is a law that says the freehold has to be offered and at a maximum rate of 22 times the ground rent. I don't recall the time scales that the offer must be made within but its a few years IIRC. This doesn't apply to commercial properties AFAIK.

[Jethro_uk]

Cite ?

When I was researching the matter years ago (including some Qs on usenet) I read an awful lot of assertions, with no references.

A cynic might conclude that surveyors and lawyers had deliberately crafted an arcane and obscure regulatory framework to perpetuate their livelihoods. But I couldn't possible comment :)

As alluded to previously (I know the OP was about commercial property, but ...) the fact that 90% of people direct you to information about buying the freehold for *flats* increases the signal-to-noise ratio. AIUI the route to freehold purchase for a flat owner is much more prescribed.

[tim...]

no there isn't

the value of a lease is the sum of the amortised value of the GR PLUS the value of the reversion interest

Whilst it is possible to express the amortised value of the GR as a multiple the reversion value is a function of the total property value and often there is no relationship at all between GR and property value

tim

[Jethro_uk]

Which is as far as I got.

Basically there's an element of (what the statutory leasehold valuation process) determines as "the freehold value" which comprises a figure derived from how much the property has increased in value since the lease was granted. Oh, and you use a proxy for that figure of "rateable value". So far so obscure. Until then realise that no property in England (residential again) has had a rateable value since 1990.

Back to the RICS bunfight again.

[Jethro_uk]

I don't know about enforceable, but first year we moved in, the freeholder wrote to us to note we hadn't suppied details of the house insurance, as noted in the lease. When we did they presented a bill of £40 (plus £25 admin fee) for insuring with a non-listed insurer.

Not having the means or time to fight it, we paid. I suspect if we had tried to fight it in the courts, (a) we'd still be fighting (b) we would have sold the property to pay the lawyers.

[dennis]

No there isn't what a right or a maximum?

Well the rights are here ...

As for the maximum value its what the solicitor told me so it may or may not be true.

[whisky-dave]

If it's the same as a flat then there is no maximum it's what the leasehold er asks for then the negoiations begin.

[Dave Plowman (News)]

Mine - inner London - forbids me from keeping pigs. Or carrying out trade as a tinker or organ grinder. Keeping chickens and running a brothel is apparently OK. ;-)

[tim...]

there isn't a maximum (well there is, it's the amount that the tribunal assesses if you take it that far, but it isn't a simple calculation that you can do for yourself)

tim

[DJC]

Long leases are precisely those with little value to the freeholder. With a lease of less than 80 years the 'marriage value' is disregarded so buying a freehold via the statutory right to enfranchisement will not be hugely expensive.

[DJC]

Rubbish.

There is some very detailed information here.

[alan_m]

The income stream is the £120 at time to do anything to the property

[tim...]

That can't be considered an income *stream*.

Most punters with such a clause in their lease will never pay the freeholder a penny under that clause.

[tim...]

that's for an extension, not for an outright purchase

agreed, but it is still an order of magnitude more than the amortised value of a peppercorn ground rent.

And it's surprising just how many people CBA with buying a lease when it cheap and get stung when it gets down to 50 years and find that the property is unsalable.

tim

[Dave Liquorice]

s/leaseholder/freeholder/ ?

Surely the leaseholder is buying so will offer as little as possible the freeholder is selling so asks for what they think they might get

• some.

[Jethro_uk]

Indeed. The main selling point of the freehold consultant that approached us was that trying to buy the freehold against any sort of deadline (like an impending sale) would allow the freeholder to write their own cheque.

[tim...]

Tis a common mistake

I know the difference and I still do it sometimes :-(

tim

[whisky-dave]

OK what is it then, as I've just gone through this. Think it's called a section 42.

But basically the leasholder tells you how much they want and this is just to increase the lease extention . If yuo don;t agree with that amount you g o through a solicitor who will tell you to get a surveyor in which you pay for. Then they get a surveyor in which you pay for. They come up with their figu res and come back to you with a new one. If you don't agree then that's that no leasehold extention, unless you take it to a tribuneral.

[whisky-dave]

No the leaseholder already owns the lease. Once the lease is up the property reverts to the leaseholder so there's no advantage to them to sell the lease or extend it as they can lose money.