Short lease flat
Discussion
Looking at a local flat as a long term punt, i will be a cash buyer. I have a few in the area and they all follow similar criteria with respect to yields and long-term potential.
It's cheap....very cheap, but for obvious reasons.
The lease has 56 years remaining, which limits its audience i.e. chances of lending against it are very slim, which obviously reflects in the px.
Ground rent is charged at £100 p.a. but the agent informs me that the property doesn't have any maintenance charges?
The flat is lease-hold and this has confused me, as i'm unsure who would be liable for upkeep etc of the block (1 of 6 flats, 1960's purpose built, 3 level).
Buildings insurance is payable by all lease-holders, which would cover any structural probs, but what about general upkeep?
My question is thus......Is this a common occurance? What would be the reasons for this?
(If its a case of all 6 leaseholders "clubbing" together, when maintenance issues arise, i foresee trouble!).
It's cheap....very cheap, but for obvious reasons.
The lease has 56 years remaining, which limits its audience i.e. chances of lending against it are very slim, which obviously reflects in the px.
Ground rent is charged at £100 p.a. but the agent informs me that the property doesn't have any maintenance charges?
The flat is lease-hold and this has confused me, as i'm unsure who would be liable for upkeep etc of the block (1 of 6 flats, 1960's purpose built, 3 level).
Buildings insurance is payable by all lease-holders, which would cover any structural probs, but what about general upkeep?
My question is thus......Is this a common occurance? What would be the reasons for this?
(If its a case of all 6 leaseholders "clubbing" together, when maintenance issues arise, i foresee trouble!).
Most leasehold block of flats have a management company in operation, with leaseholders down as directors, appointing, overseeing a Property Management Company. Of all the properties that I have bought for Buy To Let, the one leasehold flat causes me the most aggravation and problems, since they other leaseholders are simply not interested in overseeing the management of the block. This problem is common with the majority of leasehold flats, with the lack of interest shown, allowing poor, fraudulent behaviour from the management companies, the former by way of remedial work not being carried out, or fictitious work/invoices/charges being created/ or exuberant charges being invoiced by the management companies cronies.
http://www.lease-advice.org/contact/
http://www.lease-advice.org/contact/
Cheers for the reply Wings
The thing is, there is no management company.
AFAIK when things need to be done, it's down to the tenants to get together and sort it out amongst themselves?
No credit or deficit in company accounts because one doesn't exsist.
Never experienced before, hence my asking.
Awaiting my friend/solicitors opinion.
The thing is, there is no management company.
AFAIK when things need to be done, it's down to the tenants to get together and sort it out amongst themselves?
No credit or deficit in company accounts because one doesn't exsist.
Never experienced before, hence my asking.
Awaiting my friend/solicitors opinion.
Who owns the Freehold?
Speak to them, or rather get your solicitor to do so as it is they who will be in charge of dealing with the maintenance most likely in a lease that old with no Man Co.
There are far too many potential permutations to properly advise.
You are obviously aware of the costs of extending the lease, which I suspect you will find is roughly equal to the difference in the selling price and the value with 125 years left...
Personally unless I was going to own the block, or it was a properly set up and run modern development, there is no way I would look at buying a flat as a BTL property. World of Pain awaits you and that's just thinking about the practical day to day stuff, before you start to look at some of the legal ramifications.
Speak to them, or rather get your solicitor to do so as it is they who will be in charge of dealing with the maintenance most likely in a lease that old with no Man Co.
There are far too many potential permutations to properly advise.
You are obviously aware of the costs of extending the lease, which I suspect you will find is roughly equal to the difference in the selling price and the value with 125 years left...
Personally unless I was going to own the block, or it was a properly set up and run modern development, there is no way I would look at buying a flat as a BTL property. World of Pain awaits you and that's just thinking about the practical day to day stuff, before you start to look at some of the legal ramifications.
Edited by Rude-boy on Thursday 1st April 13:04
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