Flat buying issue, help please
Discussion
I am just in the process of purchasing my first flat (contained within a block of 6) The purchase price included a renewal of the lease up to the maximum term of 99 year term.
Today I received a letter from my solicitor in conjunction with the ‘Deed of surrender and lease’
I will quote directly from the letter from my solicitor:
“Having had the opportunity to consider the proposed Deed myself, I note that the matter is proceeding by way of a grant under the Leasehold Reform Housing and Urban Development Act of 1993.
I would refer you to the Third section of the draft deed in particular the provisions of clause 6(G). This provides that even though the least is to be extended, the landlord may at any time not earlier than 12 months before the 24th March 2070 and at any time during the period of 5 years ending on the 24th March 2160 apply to the court for repossession of the property on the grounds that the landlords wish to redevelop it or intend to demolish or reconstruct it.
The consequence of this right being granted to the landlord should be self explanatory. It means that in 60 years time the landlords could take possession of the property from you if they can establish that they intend to redevelop, demolish or reconstruct the whole or a substantial part of the building. It may be that the landlords do not exercise this right but it is something that you must take into consideration."
Thank you to anyone who has taken the time to read this, I’d appreciate any advice/help. Is it time to cut my losses based on this not being the deal I originally negotiated and it haven taken this long for the information to come to light.
R2TR
Today I received a letter from my solicitor in conjunction with the ‘Deed of surrender and lease’
I will quote directly from the letter from my solicitor:
“Having had the opportunity to consider the proposed Deed myself, I note that the matter is proceeding by way of a grant under the Leasehold Reform Housing and Urban Development Act of 1993.
I would refer you to the Third section of the draft deed in particular the provisions of clause 6(G). This provides that even though the least is to be extended, the landlord may at any time not earlier than 12 months before the 24th March 2070 and at any time during the period of 5 years ending on the 24th March 2160 apply to the court for repossession of the property on the grounds that the landlords wish to redevelop it or intend to demolish or reconstruct it.
The consequence of this right being granted to the landlord should be self explanatory. It means that in 60 years time the landlords could take possession of the property from you if they can establish that they intend to redevelop, demolish or reconstruct the whole or a substantial part of the building. It may be that the landlords do not exercise this right but it is something that you must take into consideration."
Thank you to anyone who has taken the time to read this, I’d appreciate any advice/help. Is it time to cut my losses based on this not being the deal I originally negotiated and it haven taken this long for the information to come to light.
R2TR
If the Landlord did seek to re-possess the property, would you or the then owner be entitled to compensation of any type.
I know that it might be 60 years or more away, but if there was no compensation, the investment would surely then be valueless and your investemnt would devalue in time.
I know that it might be 60 years or more away, but if there was no compensation, the investment would surely then be valueless and your investemnt would devalue in time.
I would ask your solicitor for more information on this. Look for example in 20 years time, so 40 years remaining, the lease at this time is beginning to depreciate, and lenders would be concerned that they are lending on a asset which in 20 years time is worth less. Some lenders have minimum lease terms that they will lend on.
I suspect that these same lenders may not accept this clause. Don't ask men on internet - ask your solicitor it is why you are paying him
I suspect that these same lenders may not accept this clause. Don't ask men on internet - ask your solicitor it is why you are paying him
davidjpowell said:
Don't ask men on internet - ask your solicitor it is why you are paying him
Spoken like a solicitor!Nothing wrong with asking, but you'd be better with a professional opinion. 'scotal' works in this arena, and if you can get him to contribute, and possibly PM him your numbers, he normally gives straight advice.
Right now, I'd imagine he's in DD's and thoroughly plastered.
grumbledoak said:
Is it worth buying for two years? Surely the stamp duty would be more than two years rent?
Relatively short leaseholds can be hard to mortgage/sell. Sixty years isn't long in that sense...
Under the stamp duty threshold, and I may keep the property on as an investment. Two years was really just a guess from me.Relatively short leaseholds can be hard to mortgage/sell. Sixty years isn't long in that sense...
Edited by grumbledoak on Thursday 30th April 20:53
R2TR
davidjpowell said:
I would ask your solicitor for more information on this. Look for example in 20 years time, so 40 years remaining, the lease at this time is beginning to depreciate, and lenders would be concerned that they are lending on a asset which in 20 years time is worth less. Some lenders have minimum lease terms that they will lend on.
I suspect that these same lenders may not accept this clause. Don't ask men on internet - ask your solicitor it is why you are paying him
David, my solicitor has indeed written to my mortgage provider to make them aware of the change.I suspect that these same lenders may not accept this clause. Don't ask men on internet - ask your solicitor it is why you are paying him
I appreciate the comment about the asking my solicitor and having only received the letter this evening I will be speaking to him first thing tomorrow morning, I just though I would take the opportunity to ask the advice of the oft very knowledgeable people of Piston heads beforehand.
R2TR
Race2the Redline said:
davidjpowell said:
I would ask your solicitor for more information on this. Look for example in 20 years time, so 40 years remaining, the lease at this time is beginning to depreciate, and lenders would be concerned that they are lending on a asset which in 20 years time is worth less. Some lenders have minimum lease terms that they will lend on.
I suspect that these same lenders may not accept this clause. Don't ask men on internet - ask your solicitor it is why you are paying him
David, my solicitor has indeed written to my mortgage provider to make them aware of the change.I suspect that these same lenders may not accept this clause. Don't ask men on internet - ask your solicitor it is why you are paying him
I appreciate the comment about the asking my solicitor and having only received the letter this evening I will be speaking to him first thing tomorrow morning, I just though I would take the opportunity to ask the advice of the oft very knowledgeable people of Piston heads beforehand.
R2TR
Neil_H said:
Race2the Redline said:
davidjpowell said:
I would ask your solicitor for more information on this. Look for example in 20 years time, so 40 years remaining, the lease at this time is beginning to depreciate, and lenders would be concerned that they are lending on a asset which in 20 years time is worth less. Some lenders have minimum lease terms that they will lend on.
I suspect that these same lenders may not accept this clause. Don't ask men on internet - ask your solicitor it is why you are paying him
David, my solicitor has indeed written to my mortgage provider to make them aware of the change.I suspect that these same lenders may not accept this clause. Don't ask men on internet - ask your solicitor it is why you are paying him
I appreciate the comment about the asking my solicitor and having only received the letter this evening I will be speaking to him first thing tomorrow morning, I just though I would take the opportunity to ask the advice of the oft very knowledgeable people of Piston heads beforehand.
R2TR
R2TR
The way that reads to me is the agreed extension of the lease to 99 years is pretty much worthless and you are only guarenteed to 60 years. Although it won't be of great concern to you if you aren't going to live there for too long, but I would have thought it would have a fairly significant affect on the price and quite possibly your mortgage offer.
sjj84 said:
The way that reads to me is the agreed extension of the lease to 99 years is pretty much worthless and you are only guarenteed to 60 years. Although it won't be of great concern to you if you aren't going to live there for too long, but I would have thought it would have a fairly significant affect on the price and quite possibly your mortgage offer.
Agreed, the situation makes no sense to me, the property currently has 73 years on the lease and the bill was due to be 10k to renew the lease to 99 years, now it seem that only pays for the a chance of it being 99 years, it could actually reduce the lease on the property.I have a call with the solicitor scheduled for midday to try and answer some of the questions.
R2TR
davidjpowell said:
grumbledoak said:
davidjpowell said:
Don't ask men on internet - ask your solicitor it is why you are paying him
Spoken like a solicitor!R2TR
Edited by Race2the Redline on Friday 1st May 15:31
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