BUYING THE FREEHOLD OF YOUR HOUSE
To be able to purchase the freehold of your house under the Leasehold Reform Act 1967 there are a number of items that you need to be aware of.
1. The leaseholder has to have owned the property for more than 2 years (doesn’t have to have lived there).
2. The lease has to be a prescribed long lease.
3. It has to have been at a low rental.
4. If at all possible you will need to have details of the rateable value if formal service of Notice is required.
In most instances the shorter the lease then the higher the cost to purchase the Freehold.
There are two methods of obtaining the Freehold, either an informal or a formal basis.
The informal basis is by prior negotiation with the Freeholder or their Agents and ultimately reaching agreement.
On the formal route, if this process is difficult or the Freeholder requires a higher figure to purchase the Freehold than expected, then Notices will need to be served in accordance with legislation and ultimately proceeding to the First-tier Tribunal (a Valuation Tribunal for working out the Freehold figures).
Both routes to purchase the Freehold can be discussed with a suitably experienced Chartered Surveyor at Fraser Wood on 01922 627686.
LEASE EXTENSIONS FOR FLATS/MAISONETTES
There are similar provisions to a house, in that the person has to have owned the flat or maisonette for more than two years.
There is a similar scenario that it can be dealt with either informally, where both parties agree a particular figure for extending the lease for a number of years on top of the lease. This can also mean that the ground rent can change and is not in a prescribed format.
On a formal basis, it is necessary to serve Notices under the Leasehold Reform, Housing & Urban Development Act 1993 and there is a specific time frame in which both the Freeholder and Leaseholder have to conform with. There is also a Statutory Deposit to be paid to the Freeholder, which is 10% of the Notice figure, and this forms part payment of the costs for the lease. On this basis there is a prescribed 90 year extension to the current lease at a peppercorn ground rent, i.e. less than £1. Ultimately, if agreement cannot be reached after the service of Notices on a formal basis, then it will again go to the First-tier Tribunal
There are measures when a number of Leaseholders within a block of flats on the same Title can try and purchase the Freehold. There need to be a set number of parties wishing to participate in this and ultimately signatures are required for all those involved to serve necessary Notice on the Freeholder. This can be a very lengthy and time consuming process to get all the Leaseholders to agree and the prescribed number and then to subsequently serve accordingly.
Ultimately if the figures cannot be agreed by negotiation the matter will have to be settled by the First-tier Tribunal.
Before commencing any of this type of work, it is imperative that you consider all of the implications and the eligibility of all persons concerned.
If you require any further help or guidance in connection with any leasehold matter on a residential property, i.e. house, flat or maisonette, then please do not hesitate to contact your local Freehold/Leasehold Expert, Andrew Perrin MRICS, on 01922 627686 or firstname.lastname@example.org