Buying the freehold on my block of flats

[motorbiking]

I would agree. Personally I would not be offering those with 60 years the same deal as those with 80+ years. But the more who pay in, the better the deal for everyone. So there is a need to balance. At this stage, he needs worse cases and votes.

It's quite clear that the freeholder is flogging the asset, because of the changes in the leasehold reform act and those threatened/promised by the new government. of course they could amount to nothing and the leaseholders are left with a 3rd party such as the one I mentioned. Profiteering.

Nothing stops the group making a counter offer, given the risk.

 

[blup]

It can come down to numbers, if majority are near end of lease,

 

[Keitai]

Just knocked this up-

 

[Keitai]

Getting the freehold definitely means cheaper leases, right? One guy asked this-

He heard that they have to buy their leases using the gov set formula anyway.
That It would get very messy otherwise as the same people would set the amount to pay and that’s asking for trouble.

And who decides the amount to charge then? What if one person says £15k and one person says it should be free !

 

[Keitai]

I would agree. Personally I would not be offering those with 60 years the same deal as those with 80+ years. But the more who pay in, the better the deal for everyone. So there is a need to balance. At this stage, he needs worse cases and votes.

It's quite clear that the freeholder is flogging the asset, because of the changes in the leasehold reform act and those threatened/promised by the new government. of course they could amount to nothing and the leaseholders are left with a 3rd party such as the one I mentioned. Profiteering.

Nothing stops the group making a counter offer, given the risk.

What exactly are the changes in the leasehold act?

 

[Keitai]

Is this true? Sent from neighbour-

I had this today

Good morning,
My name is xxxxx and I am the owner of flat 18 xxxxxCourt. I can't attend the meeting today. Companies this days are trying to sell the freehold to flat owners as they know that it will decrease in value due to government planning to change the law. I have exactly the same situation with my other flat and here owners decided not to buy but wait until for new law as we think that the price will go down. Anyway that's my opinion, but I will be happy to follow what the flat owners of xxxcc Court will decide.
Regards xxxxx


Also, the solicitor basically said the main reason to get it is to get cheaper lease extensions, which is still true right?

We can try and instruct our solicitor to get request the £61000 is lowered? I guess he'll use a valuer to do this

 

[denso13]

And who decides the amount to charge then? What if one person says £15k and one person says it should be free !

Tell them not to worry, you've had great advice from someone on a DIY forum.

 

[motorbiking]

Is this true? Sent from neighbour-

I had this today

Good morning,
My name is xxxxx and I am the owner of flat 18 xxxxxCourt. I can't attend the meeting today. Companies this days are trying to sell the freehold to flat owners as they know that it will decrease in value due to government planning to change the law. I have exactly the same situation with my other flat and here owners decided not to buy but wait until for new law as we think that the price will go down. Anyway that's my opinion, but I will be happy to follow what the flat owners of xxxcc Court will decide.
Regards xxxxx


Also, the solicitor basically said the main reason to get it is to get cheaper lease extensions, which is still true right?

We can try and instruct our solicitor to get request the £61000 is lowered? I guess he'll use a valuer to do this

Yes there is some truth to it. See my earlier post on the leasehold reform act.

 

[motorbiking]

Getting the freehold definitely means cheaper leases, right? One guy asked this-

He heard that they have to buy their leases using the gov set formula anyway.
That It would get very messy otherwise as the same people would set the amount to pay and that’s asking for trouble.

And who decides the amount to charge then? What if one person says £15k and one person says it should be free !

Break it down in to steps.

1. Do we all understand the benefits of freehold ownership

2. Do we have enough people to move forward?

3. How do we do we divide the costs fairly.
4. Is the price fair based on the formula and changes ? Can we counter offer? What price are we willing to offer?

Did you see the formula I provided a link to?
Have you seen current lease extension calculators?

 

[motorbiking]

See also this site (not a recommendation).

Covers how you counter offer.

Right of First Refusal - Judge & Priestley | Solicitors in Bromley, Kent

Have you received a Section 5 Notice ? If so, it basically means that the Landlord is giving the Leaseholders an option to purchase the (often Freehold)...

www.judge-priestley.co.uk

If you don’t get a chunky majority wanting to move forward allowing for a few who drop out. I personally would withdraw. If you proceed and then fail you are liable for the landlords costs.

If the landlord rejects your counter offer. You are deemed to have rejected his. But he cannot sell below the offer to you.

 

[motorbiking]

You should also read this:

Should I wait to extend my lease? I have heard that planned changes could make lease extension cheaper. - The Leasehold Advisory Service

This is a difficult question to answer and depends on your personal circumstances. The Act is not in effect and […]

www.lease-advice.org

Your neighbours position is certainly worth paying attention to.

 

[Keitai]

Break it down in to steps.

1. Do we all understand the benefits of freehold ownership

2. Do we have enough people to move forward?

3. How do we do we divide the costs fairly.
4. Is the price fair based on the formula and changes ? Can we counter offer? What price are we willing to offer?

Did you see the formula I provided a link to?
Have you seen current lease extension calculators?

I used your formula of last 20% is divided into how many years left on your lease u have if that's what you meant. I'll read back when I have time the government formula.

Benefits of freehold are cheaper lease extensions right? It won't be a rigid government set formula will it which means it's the same price if we have it or outside company? Makes whole thing pointless doesn't it? Is this what the government is planning to protect people getting overcharged

Can we get rid of management company? Ours is Foxes, rip off.

Increased value when selling.

What other benefits I can't think at the moment.

No ground rent!


2. We have ten confirmed and three possibles out if 22 flats. I can't think of anyone else.

3. It was agreed that longer leases pay less probably what u said about last 20% is different.

4. I dunno answer if it's a fair price, surely the solicitor will negotiate a cheaper price if he thinks he can, he'lluse a valuer? I'll try get my head around the formula later.

Counter offer , how much to go dunno. The price is £61000. Surely solicitor can be instructed to Counter offer.

 

[motorbiking]

I can see you are being overwhelmed by the information. I really can't give you advice on this as I am not in your shoes.

It is worth reading this:

Government reforms to make it easier and cheaper for leaseholders to buy their homes - The Leasehold Advisory Service

A guide to the leasehold reform proposals recommending 990 year lease extensions at zero ground rent.

www.lease-advice.org

In YOUR situation and given the general direction that the leasehold reform act is taking this along with the commitments made by labour (which they may or may not deliver). If this was dragon's den and I was you, I'd be declaring myself out, for 3 reasons:

1. You already have a long Lease
2. The value of the freehold is going to/likely to fall due to the reform.
3. You don't have the money to invest without borrowing it.

Regarding your management company. If this is a residents controlled management company you already have the power to go out to market. Talk to your fellow directors about tendering the contract.

Leasehold reform is taking leaseholds in the direction of:
- controls on rip off insurance
- v.long leases (990 years)
- peppercorn ground rent (almost nothing)
- loss of landlord power to seek forfeiture of lease for small debts

2. We have ten confirmed and three possibles out if 22 flats. I can't think of anyone else.

For your neighbours with <80 year leases, its probably worth them pursuing, but given the demographic you described, there is a real risk of your bid collapsing and you being saddled with your LL's costs.

Having said all that, if the general feeling among residents is we'd like to buy, but are happy to wait, then a cheeky offer has no risk (other than the LL may accept it).

4. I dunno answer if it's a fair price, surely the solicitor will negotiate a cheaper price if he thinks he can, he'lluse a valuer? I'll try get my head around the formula later.

yes but he's going to charge you something around £250-300p/h +VAT. its better to do the work yourself. It's not a negotiation. its an offer to buy at price £X, you can counter offer, but if he rejects, you are deemed to have rejected your right of first refusal and he can sell to 3rd party.

 

[blup]

Not read the latest posts in detail but there seem to be two competing issues. Getting your fellow l/holders on board, andthe actual costs going ahead. Both are negotiable but if you and your co tenants aren't clear about your goals there seems little point in proceeding. But as previously stated having control of tne freehold and therefore the cost, and timely undertaking, of maintenance etc, has to be bettter than a third party landlord who might try to rip you off or not bother with maintenance or both.

 

[motorbiking]

It might be more simple than that. As I understand it most of the neighbours don't have the money to invest, so no matter how much they want to go for it, they may not be able to find the money. With 10 out of 22 and 3 on the fence, there is a real risk of the bid collapsing and the LL rightly seeking costs. That would be a real shame for people who can't afford to waste the money.