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F E Smith
F E Smith, Advocate
Category: Law
Satisfied Customers: 10226
Experience:  I have been practising for 30 years.
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I have been offered the opportunity to purchase the freehold

Customer Question

I have been offered the opportunity to purchase the freehold of the land on which my house stands. The property is worth around £250000 an d the lease is for 999 years commencing 1963 subject to a ground rent of £8.80 per annum
I have been quoted a price of £3000 subject to contract and including all sale costs. Your comments would be appreciated together with an estimate of what legal costs I would
incur using a solicitor to act for me.
If the lease is sold to a buyer other than myself could the ground rent charge be
increased without my agreement. Reading the lease I can see nothing which would allow any buyer to revue/change the original terms
Submitted: 1 year ago.
Category: Law
Expert:  F E Smith replied 1 year ago.

This kind of question is quite common.

There may be a provision to increase the ground rent in the 1963 lease but, unless there is, it is fixed. It is likely to be fixed.

If that is the case, you have to consider the financial implications that if you paid the ground rent for the next hundred years, it is only £880 as opposed to £3000 to buy the freehold. Add, say, £500 of legal costs on top of that, you are probably paying about £1500 over the odds.

The people that are offering the opportunity to buy the freehold have probably bought hundreds of them at the same time for a knockdown price and that’s why they are offering them for sale quite simply because the cost of collecting £8.80 ground rent, whilst it was a good incoming 1963, now it’s going to cost more to collect the money than they have money coming in.

Some people like owning the freehold of the house but with a 999 year lease, it’s debatable whether it’s worth owning or not. There may be a provision whereby you have to ask for the freeholders consent to do work and it would mean that you would not have to ask for that consent. Some leases allow for the freehold charge for that consent and that alone could be a couple of hundred pounds if the lease does not specify otherwise.

The difficulty you have is that if you want to argue over whether the cost to buy the freehold is reasonable or not, it’s going to cost you times that in legal costs if you lose.

Can I clarify anything for you?

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Best wishes.


Customer: replied 1 year ago.
Your response was appreciated and my query was answered very promptly. However, I feel that I will now have to tke the lease to a local solicitor to get it checked for a definitive answer to my question re the possibility of a ground rent increase. Your help is appreciated but it would not be practicable to ask you to undertake a review of the lease without submitting it for your perusal and it will be easier to use a local expert. Many thanks
Expert:  F E Smith replied 1 year ago.

Thank you. I would always suggest that a local solicitor did all the paperwork for you.

At least now you have an idea of whether this is worth going forward with or not.

You should now see a button which will allow you to rate the service online which will trigger my payment. Thank you