Lease extensions for flats – surely just another scam?

 

Labour Tory quotes

Perhaps I have missed something…?

So you know how it works on the BBC show, Homes under the Hammer: canny buyers pick up a bargain derelict property at auction, gut the interiors and have the local experts round to gush over the yield potential on their investment and initiative. The canny buyer pays once for the deal. The rest of their outlay goes on the building. Pretty much any freehold transaction goes this route, whether it is a derelict at auction or general trade. Continue reading “Lease extensions for flats – surely just another scam?”

Dear Mr Javid

Dear Mr Javid

“Dear Mr Javid,

You do not know me. I am a residential leaseholder in England. Please do not be disappointed if you received a relatively low number of responses to your leasehold reform consultation. More importantly, please do not misinterpret this as evidence of a silent majority of happy campers. I’m sure you know this would be an absurd extrapolation. People can be rather cynical that their views actually matter, even unto failing to vote. Continue reading “Dear Mr Javid”

What, no sheriff of Lease-ingham?

Copandsheep

No sheriff but plenty of Robin Hoods?

You may have noticed the number of times ‘criminal offence’ appears against things a landlord or his agent should do? Simple things like providing copies of insurance, or summaries of accounts? Continue reading “What, no sheriff of Lease-ingham?”

Lease Extension Process

PV formula

The tortuous extension route is set out in Chapter II, Part I of the LRHUDA 1993, which confers (on a qualifying tenant of a flat for 2 years) a right to acquire a new lease on payment of a premium determined by a statutory formula. Except the freeholder does not have to counter with a formula based premium offer.

The new lease replaces the existing lease for a term expiring 90 years after the term date of the existing lease and at a peppercorn rent for the whole term (section 56(1) LRHUDA 1993 ). Continue reading “Lease Extension Process”

Ground Rent

Ground rent lettering 2

Spotlight 2012Any doubt as to the incentive to sustain leasehold over commonhold is perfectly summarised in an innocent Savills Spotlight Research report in May 2012 titled Spotlight Ground Rents Spring 2012 headlined “Ground rents are set to become an attractive investment in a growing market”. Three quotes are of particular note: Continue reading “Ground Rent”

Lease extensions -the basics

Lease extension

Introduction

In this series of posts I will dig into the horror (from a leaseholder’s point of view) that is the residential lease extension valuation caper. There is much profit to be made at the leaseholder’s expense. This seems to be the deliberate intention of the legislation. Continue reading “Lease extensions -the basics”

Service charges – what’s the fuss?

Oilman

The first rule of the £leasehold caper is the freeholder must pay nothing.

For the freeholder to pay would be outrageous. The freeholder may buy the freehold for less than 2 to 5% of the total value of the land and buildings and thereby own the reversion interest in the buildings – that will do nicely – but they must never be expected to pay for anything, the courts would howl with derision and dismay. How unfair!

Given the nature of leasehold, there will be communal costs. Things like building insurances, building maintenance, grounds maintenance, cleaning etc. There may be old boundaries that have seen no repairs for a hundred years prior to the infill leasehold development. Never mind, the lease will make clear that the leaseholders have to pay an equal apportionment of all the costs, old boundary and all. Continue reading “Service charges – what’s the fuss?”