Period Lease renewal confusion

[JoceAndChris]

Absolutely correct Feltwell!

 

[JoceAndChris]

Those who are 'panickers' may well have read, as I have, in those property question and answer pages of the weekend newspapers, that it is a 'good idea' to extend/renew the lease---- all in the interests of 'trouble free' selling--- hmm--of course there are genuinely unsorted conundrums connected with leasehold, but somebody's pocket is going to be well lined at some point.

Reading through the correspondence of the Management Committee meetings, (which I don't attend) I find that a number of the panickers have extended their leases already, and we are one of the few who still hasn't. Chris is keen for us to sort this out now, as the renewal will rely on the co-operation and signing by all the freeholders/flat owners. There wouldn't be any difficulty achieving this now, but if in future some dodgy landlord were to buy up a load of flats there's a possibility they wouldn't co-operate with us. It's an unlikely scenario, but perhaps worth taking trouble to avoid.

and at the point the company tok on the new lease, you'd ahve thought it would nullify it, and start a new 999 year lease Maybe the company was formed 41 years ago?

When all the flats were created the flat-owners clubbed together and bought the freehold. (early 80s) The law at the time stated that there would have to be a 99 year lease on each of the flats. Mad, isn't it!

 

[JoceAndChris]

If the freeholders are the leaseholders and there are no other parties involved I would try to co-ordinate all 14 flats to collectively extend the lease on all the flats at the expense of the management company - paid from the service charge.
I can see trouble ahead if some owners have paid for extensions and others have not.

I'm not a lawyer and that isn't legal advice though

It seems to be that there's a fairly hefty legal fee for this paperwork. It was decided at a Management Committee meeting that each flat owner would have to foot the bill. Each flat only pays £50 a month into the kitty, and the cost of decorating the exteriors every ten years or so is £12,000!! It's a pair of huge, tall buildings that require scaffolding. So there never are sufficient funds for roofing, sash repair etc, and even plumbing and drainage issues and the trees in the garden that need regular pollarding are considered to be costs that come from the kitty. As you can imagine, there's a good deal of dissent and irritation with the maintenance!

Anyway, thanks for all the very helpful posts. Although it's such a dull thing to have to spend money on, I think it has to be done.

 

[LadyArowana]

As you can imagine, there's a good deal of dissent and irritation with the maintenance!

I think that holds true for any building. The service charge for our apartment is fierce because of the cost of maintaining it to a reasonable standard. People have different priorities about what they like to be nice about it. So we have some residents that want the gardens to be manicured to within an inch of perfection, but don't care if the paint falls off the outside. Others couldn't live without there being a resident porter and daily vacuuming of the hallway, but would have the carpark full of potholes and the garden as an impenetrable wilderness! The board has to try and steer a path through that in terms of allocating funds. The last time the common hallways etc were redecorated the mistake was made to have a "committee of residents" to propose schemes that people could vote on. This did not go well. The number of e.mails that flew back and forth was truly epic. Even the simplest thing like whether the pictures that had been hanging up should go back where they were, be moved, replaced or got rid of completely was cause for a battle royal. I decided that I would concern myself with what happened inside my front door, less so with what happened outside. The pictures in question ( repros of old pix by Aubusson ) are not what I would ever want in my own hallway, however they are in no way offensive as bit of general decor in an area where there is a possibility they could be damaged. It seems that the "pro duck" faction has finally carried the day though as I notice on this visit that the previously absent fowl have returned. I made the mistake of remarking on it to one of my neighbours yesterday, clearly she was not part of the "pro duck" lobby!

 

[skier-hughes]

Reading through the correspondence of the Management Committee meetings, (which I don't attend) I find that a number of the panickers have extended their leases already, and we are one of the few who still hasn't. Chris is keen for us to sort this out now, as the renewal will rely on the co-operation and signing by all the freeholders/flat owners. There wouldn't be any difficulty achieving this now, but if in future some dodgy landlord were to buy up a load of flats there's a possibility they wouldn't co-operate with us. It's an unlikely scenario, but perhaps worth taking trouble to avoid.

Don't see why, a flat with no lease and occupiers in a building they own the majority of would cause loads of trouble for them, I'd ignore it, go back out and cuddle a chicken and pour Chris a scotch when he comes home tonight!!

 

[Flyfisher]

. . . or sell up and buy a totally freehold property, where you'd be in complete control?

 

[Lime]

. . . or sell up and buy a totally freehold property, where you'd be in complete control?

I agree.
Leaseholding in London is common but ownership by committee is a recipe for future trouble.
The fact that many are rushing to renew on the basis they may have problems in the future speaks volumes about the setup.
IME neighbours are perhaps the worst arbiters on those that live near them and friends usually put their financial interests first too.

 

[Feltwell]

I think that holds true for any building. The service charge for our apartment is fierce because of the cost of maintaining it to a reasonable standard. People have different priorities about what they like to be nice about it.

Sounds like a nightmare, quite frankly. I've always dreaded doing changes in offices - someone is always not happy, because they're now too hot / too cold / too close to the photocopier / too close to Fred / they used to be next to a window or whatever. It's impossible to keep everyone happy, so now I adopt the dictator approach and everyone has to like it or lump it! The thought of trying to make changes by committee to what is or is perceived as an area of people's homes......

The only flat I've ever lived in was university accomodation, so magnolia on the walls and grey lino on the floor was the order of the day for all communal areas.

 

[LadyArowana]

The only flat I've ever lived in was university accomodation, so magnolia on the walls and grey lino on the floor was the order of the day for all communal areas.

Next time the common parts are up for redecoration I shall suggest that and then everyone can be united against me and thus my cunning plan to make sure they are play nicely will have been achieved :twisted: Honestly speaking the situation is not as bad as it sounds, the majority of people who live here are very nice and cause no trouble. Of course it is a tiny vocal minority that give rise to the issues. Thankfully none of the serial complainers share our floor, we have a very lovely widowed Marksist ( with youngish son and dog ), an older couple who have been here forever and remember the time when the freehold was owned by a hideous landlord and think that whether there are ducks on the wall or not is of little consequence, a gay American musician who divides his time between London and LA, and a family that are renting from a developer ( he bought thinking of doing a quick renovation and sell on and was badly caught by timing and the cost of the project ). We do have a horrid downstairs neighbour, he tried to be slightly underhand about something and was found out, and now always tries to ignore me, so I take much delight in greeting him with a very cheery "hello, how are you?" :lol:

 

[Nigel Watts]

Having a resdients association which owns the freehold via a limited company in which each resident is a shareholder is pretty common.

I think potenial sellers of leasholds might be worried about market value. Leaseholds tend to loose value rapidly when they get below 50 years and mortgage lenders get twitchy. Extending all the leases to 999 years does sound like a sensible thing to do in the circumstances, although it may well be a pain for those who currently have no plans to sell. If they are all being done at the same time it should be cheaper than doing them invidiually.

If the leases are not extended then in 59 years time the property will revert to the freeholder, in this case the company owned by the residents. The shareholders (residents) would then be able to grant themselves new leases. There might be some tax implications with all this, but I'm not sure. This aspect would be worth investiagting, if only to establish that there are none.

 

[JoceAndChris]

. . . or sell up and buy a totally freehold property, where you'd be in complete control?

Oh no, that would be cutting off nose to spite face I think. The flat (which is just one bedroom!!) brings us £1400 a month (still just covering the mortgage at the moment though) and it's never empty, not even for a day - one-bed flats in lovely Highgate with the front and back entire private gardens of a 7 bed house being exceedingly rare. It's more garden than flat, it's a real bolt-hole from the busy city. On top of that we spent around 40 k making it very comfortable indeed, I wouldn't want to have to go through that again anytime soon. It still galls me that the bathroom in that flat is 50x nicer than our bathroom here! And they've got water, and lovely heating. :evil:

Having a resdients association which owns the freehold via a limited company in which each resident is a shareholder is pretty common.

I think potenial sellers of leasholds might be worried about market value. Leaseholds tend to loose value rapidly when they get below 50 years and mortgage lenders get twitchy. Extending all the leases to 999 years does sound like a sensible thing to do in the circumstances, although it may well be a pain for those who currently have no plans to sell. If they are all being done at the same time it should be cheaper than doing them invidiually.

If the leases are not extended then in 59 years time the property will revert to the freeholder, in this case the company owned by the residents. The shareholders (residents) would then be able to grant themselves new leases. There might be some tax implications with all this, but I'm not sure. This aspect would be worth investiagting, if only to establish that there are none.

Thanks Nigel, that's useful. Will do as you suggest.

The last time the common hallways etc were redecorated the mistake was made to have a "committee of residents" to propose schemes that people could vote on. This did not go well. The number of e.mails that flew back and forth was truly epic.

Oh how funny, I can just imagine that. Thankfully when we were decorating the hallways I was able to take charge with certain issues and people were fairly mellow. I'm waiting for one particular resident to move out though, he's blocked me for ten years from removing the carpet in the hallway which conceals a really good original Victorian floor of encaustic tiles, and also from stripping out some nasty painted MDF that covers up original stained glass panels by the side of the door. He thinks the noise of footsteps would become intolerable in his flat, I think the tiled floor would just need a good runner and it would be fine. He thinks the stained glass could get broken in a burglary, which it could, but what a stupid way to live your life. It is irritating having to negotiate over these kinds of issues, and deal with the long festering bitterness of fundamental disagreement of how the house is best presented, and how period features are best looked after, which is one of the main reasons why we both determined on leaving London that we wouldn't have any neighbours ever again, which is proving to be an excellent decision.

 

[Penners]

. . . or sell up and buy a totally freehold property, where you'd be in complete control?

I agree.
......ownership by committee is a recipe for future trouble.

I agree, too. Shared ownership of anything relating to property is invariably a source of frustration and conflict at some point or other. I have always resisted buying any property that has even a hint of sharing with anyone else - even a shared drive can be troublesome.

None of which is any help to you I'm afraid, Joce, but I can only say that I tend strongly towards Flyfisher's view.

 

[Feltwell]

I agree, too. Shared ownership of anything relating to property is invariably a source of frustration and conflict at some point or other. I have always resisted buying any property that has even a hint of sharing with anyone else - even a shared drive can be troublesome.

I agree, but so many old properties that I've seen have some kind of quirky access arrangement that sometimes I don't think you've got any choice but to accept them if everything else is right. They are not desireable though and will put some people off a house.

We've got a couple of odd things here (apart from the owners) - the boundary with next door is their house wall, so all their drains that sit alongside that wall and only serve their house are strictly speaking on my land. Their roof overhangs this area slightly - it's in a right old state and I worry that a tile is going to come down on one of our cars. The "new" owner, 4 years in, keeps telling me that he's getting the roof done and asks me every year if I mind having scaffolding on my driveway so they can do the work, which of course I don't mind at all, but he's still not actually done it!

We've also got a return from the end of our garden across the back of a neighbour's garden to a side lane. It's not our land according to the land registry map - half of it belongs to a neighbour, half of it is shown as being open onto the lane. However, it is all fenced off as if it is ours and has been that way as far back as anyone can remember, and we have letters going back to the 1960's made during property sales that say this house has always had access across it. Our neighbours don't seem to realise that it is theirs. We've taken the view that the fences are how they were when both we & they bought our houses, and if they ever did ask for it then it probably wouldn't be worth falling out over. It's a useful access more than anything else and we'd have a reasnoble argument that access has to be preserved, as we've evidence that it's been that way for at least 50 years, but it's not our only access.

 

[Flyfisher]

. . . or sell up and buy a totally freehold property, where you'd be in complete control?

Oh no, that would be cutting off nose to spite face I think.

Surely not if you could buy a freehold property that would command the same rental value?

I could understand if there was some sort of emotional attachment, but otherwise I'd regard it as a mainly financial exercise and even without accounting for your time, effort (and stress?) in dealing with the management issues, there is a defined cost that reduces the current rental value.

It might at least be worthwhile investigating alternative property investments that might offer fewer management issues. The worst that could happen is that you verify you currently have the best possible arrangement. :wink:

 

[MdB]

Their roof overhangs this area slightly - it's in a right old state and I worry that a tile is going to come down on one of our cars. The "new" owner, 4 years in, keeps telling me that he's getting the roof done and asks me every year if I mind having scaffolding on my driveway so they can do the work, which of course I don't mind at all, but he's still not actually done it!

Lets say the slate does come off and damages your car. If it is a foreseen circumstance then you can claim off their house insurance, otherwise it counts as an act of god and has to be claimed off your car insurance. You have discussed the issue with your neighbour so this shows it to be a foreseen issue so a claim should be okay unless they deny talking about it.

I had a neighbours wall fall on my car. As it wasn't obviously in bad nick, I had to claim from my car insurance. On the other hand, my wife had a tree from the neighbours land fall on her car. She was able to claim on their insurance as it was the fourth tree to fall down in the last 18 months and we had been complaining that it needed to be sorted.

 

[Feltwell]

I think I'd definitely try their insurance first in any event. Luckily, so far it's only been small bits of tiles and they've missed the cars, which we tend to keep away from the problem area as much as we can.

Ironically the only damage so far has been from a bit he did repair! Further along is what was an outhouse, with a single pitch roof with ridge tiles sat atop the high point, which is on our side. When he repaired that roof, he ran out of time that day and didn't mortar these ridge tiles on. Fast forward a few months to a storm, one of the ridges blows off and smashes straight through a cast iron manhole cover, blocking the drain inside, which is his drain. As this was hidden down the side of my garage I didn't notice until the smell became prevalent a few days later....

Not only did I get the job of clearing it up as he was away, I got fed up of waiting for him to replace the cover & frame and did it myself about 3 months later, only to be greeted about 5 months later by "Ohh, I've got that cover." They say the cobbler's children are the worst shod - this chap is a builder, of course!

 

[Fred Drift]

I've always dreaded doing changes in offices - someone is always not happy, because they're now... too close to Fred

Hey - don't bring me in to this.

I'm busy mind my own business and watching the price of fish.

 

[Penners]

Don't talk to me about the price of fish. I've got a sore eye and I'm looking for a site for it.

 

[FamilyWiggs]

Don't talk to me about the price of fish. I've got a sore eye and I'm looking for a site for it.

Here it is Penners:

http://www.siteforsoreeyes.com/

 

[Penners]

:lol: