I wasn’t worried until I tried to sell?

by Readers Question

8:14 AM, 23rd July 2020
About 2 months ago

I wasn’t worried until I tried to sell?

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I wasn’t worried until I tried to sell?

I purchased a buy-to-let property at Auction in 1996 which I believed to be freehold and was registered as such when my ownership was recorded with UK Gov Land Registry. The legal work involved was carried out by a solicitor with whom I had a long-standing association at the time.

When I discovered it was leasehold on a thousand year lease I took no action and was naïvely unconcerned with the Ground Rent being a mere £30 per year and 997 years period for expiry of the lease.

However, soon after purchase the leasehold company concerned attempted to increase the yearly Ground Rent which my then acting solicitor pointed out there was no provision in the deeds for increase. That appeared to be accepted by the leasehold company as no further correspondence ensued.

I am now in the process of selling the property and have recently received a list of charges the Freehold company state they require for every circumstance arising since I bought the house, but which has never been brought to my attention during 24 year period under my ownership.

That list includes a charge for permission for anything and everything I have carried out by way of improvement to the property when under my ownership. Example of charges being new PVC windows, External Insulation to comply with C02 omissions under Government sponsored Green Deal, installation of new kitchen and I’m sure many more items.

Finally and most important a charge for each tenancy ever created in the property which I will find at this stage of proceedings impossible offer.

My question is it legal for the Freeholder to imposes such charges for the first time 24 years after my ownership commenced or is it another try on as with the Ground Rent which was not legal and therefore not impossible?

My next question relates to Freehold Landlords involvement and I point, naively again perhaps, to the name Landlord. Does the landlord of the freehold retain an interest in the property for the duration of the lease or just the land ie Landlord of the Freehold as the name suggests?

Many Thanks

JR


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Comments

Lindsay Keith

8:45 AM, 23rd July 2020
About 2 months ago

Query Limitation?
Get first class legal advice!
Ask Property 118 for the appropriate reference.
Good luck!

Bob

9:28 AM, 23rd July 2020
About 2 months ago

I have a share certificate, duly signed by director and secretary, for share of freehold of a flat, but due to internal conflicts between the directors, the share certificate is not accepted by some of the directors.....what is the solution

Kate Mellor

11:32 AM, 23rd July 2020
About 2 months ago

Firstly, the fees are not due until demanded in a prescribed form. Secondly there is a 6 year statute of limitations, meaning they don’t have any legal grounds to recover debts older than 6 years, they are what is called ‘time-barred’.
Consult with the leasehold advisory service in the first instance https://www.lease-advice.org/ , they have a telephone advice line. Get your solicitor to write to them to explain the limitations of their position.
I had a firm who’d purchased the freehold write to me demanding back payment of ground rent, (not using the correct form, but I didn’t bother about that), but they soon cut the bill down to six years once I pointed out the rest was time-barred.
You will need professional advice as to what they are entitled to charge for. I believe if your lease states you need permission for a thing, they are entitled to charge for the grant of that permission, galling as that is! Although, how do they know what you haven’t asked permission for if you don’t tell them? Again, it’s only things done in the last six years that are relevant, so hopefully that makes your potential bill far more manageable.
They of course have you over a barrel as you need to get their sign off on your financial obligations in order to sell & remember you don’t want to give your buyer any reason to think they are buying a problem property with a freeholder who will stick it to them at every turn!

Graham Bowcock

12:06 PM, 23rd July 2020
About 2 months ago

Hi JR

As Lindsay says, you need some good legal advice, but it does sound like a try on.

You have said you own a property, but not said if it's a flat or house. In general lease for flats are more prescriptive, for obvious reasons, whilst those for houses (especially in 1996) tend to be less so. Most leases of that vintage did not include rent review provisions; if your lease doesn't allow for it then it can't happen.

Some of the items being claimed are quite unusual.

As is often the case, though, the best advice will come from someone who has your lease in front of them and can take you through the agreement, applying statute and case law, etc.

Puzzler

8:37 AM, 25th July 2020
About 2 months ago

What does it say in the lease? They cannot charge for anything not provided for. Look at the LEASE website for details on what can be charged and in what time frame.

Puzzler

8:53 AM, 25th July 2020
About 2 months ago

and who is the freeholder? is it a limited company in which you own a share or are a member or is it a third party?

To try to increase the ground rent suggests a lack of knowledge which makes me think it might be a company which is self-managed?

The landlord or lessor or freeholder holds the land and any communal parts of the building (generally). They can charge a fee for consents but they have to be reasonable and properly demanded. How much are they charging? Did they provide you with these consents or are they trying to do that retrospectively too?

Here is a document providing some details.

https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/684250/Section_131_HPA_Guidance_note.pdf

Alison King

15:20 PM, 27th July 2020
About 2 months ago

They are trying it on. These hundred year old 999 year leases cannot be increased and they cannot charge you fees. They tend to buy them in bulk at auction for peanuts in the hope that either the law will change or they can extort money out if you such as random fees or trying to sell you the freehold for more than it is worth. If you go on the land registry site you may be able to find out which others they own nearby. There are thousands of these properties in Manchester, Sheffield and Liverpool. It shouldn't be difficult to find a solicitor that can deal with it if you are not confident.

Freda Blogs

12:03 PM, 28th July 2020
About 2 months ago

The answers to most of your Qs lie in the lease wording, so it is important to get this reviewed, side by side with the demands being made.

If the freeholders have not raised any queries or objections to much of what you have done over the last 24 years, they have likely 'acquiesced in the breach' (if there was ever a breach of a term of the lease) and/or the limitation period for some or all of the issues has passed.

Kate Mellor

19:10 PM, 28th July 2020
About 2 months ago

You must bear in mind though that the OP is in a time-sensitive situation and can’t be heading of to the FTT over this stuff with a sale pending.
All you can do is send a strongly worded solicitors letter setting out the legal position and hope they see reason and will come to a compromise with you on anything they claim you owe from the past six years (which is all that they can pursue you for with any chance of success).
You don’t want to lose a sale over this if you can avoid it.


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