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Gel

Can Somebody Explain The Pros And Cons Of Leaseholding?

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My wife/ex wife is looking at other proerties and has found a leashold property.

Her father, mother, brother and friends have all said not to take it and to buy a property instead.

Can anyone shed light as to the pros and cons of a leasehold, the term is 150 ears apparently.

Oh and is this much different to a freehold?

Many thanks,

Gel

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Yeah it used to be that after 150 years you own squat.

But I think now after 150 years you have the right to buy it freehold.

So your grand kids can pay for it all over again.

I might be wrong but its a bit of a con.

The term is usually 99 years. Just like a timeshare!!

Hang on.

Why the hell are you buying now anyway, hold those horses, wait and see.

Edited by ?...!

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you have to renew/extend the lease, usually costs thousands of pounds, i believe it costs more the closer you get to the end of the lease, also ask about additional maintanance charges...

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One advantage of leasehold is that it forces residents to abide by the rules of the block, because if you flout the rules, you lose your property.

For example, some blocks don't allow residents to install wooden flooring (too noisy); others don't allow residents to rent their properties out (this ensures all residents treat the block with care and reduces security risks).

What's more if all residents in a block were freeholders, it would become much harder to force them to pay their service charges. You'd only need one dodgy resident to treat the block badly to reduce the value of everybody's properties.

Leaseholders normally get the opportunity to extend the lease for a nominal fee before the lease becomes too short, and nowadays have the right to buy the freehold if they feel their service charges are being abused.

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also ask about additional maintanance charges...

Particularly if it's ex-local authority. Councils can really hammer flat buyers with service charges, especially for things like roof replacement.

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And if you ever buy a leasehold never do anything other than repaint it unless you are a professional developer.

Alternatively, make sure you know exactly what the rules of the block are before you buy the flat.

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Not totally sure that the lawyer's advice is correct. From my limited knowledge I would expect that for them to forclose they would have to prove to the court that the breach was sufficiently material to justify that remedy and that sufficient opportunity had been given to you to correct the breach.

I would also suggest that the references in the letters to the agents is sufficient proof of the verbal agreement and that the alterations were allowed, a written agreement may not be strictly necessary.

The message however is clear. In leasehold property ensure that you read and understand the lease and ensure that any subsequent agreements are properly documented. Even if you win in the end its a pain in the a*** that you can do without.

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One advantage of leasehold is that it forces residents to abide by the rules of the block, because if you flout the rules, you lose your property.

For example, some blocks don't allow residents to install wooden flooring (too noisy); others don't allow residents to rent their properties out (this ensures all residents treat the block with care and reduces security risks).

SNIP

Nice in theory, very hard to enforce in practice. If you want to be a pain in the bum to your fellow leaseholders, there's very little short of being taken to court that a fellow leaseholder can do to you... and try selling a place with that in the due diligence file.

Other bad things about being a leaseholder:

- being forced to by the freeholder to use their mate's workmen for jobs: high price, low quality but excellent backhanders for the freeholder

- neglect of sinking funds, in fact, general neglect

- being forced to pay a large service bill for services that never eventuate (e.g. 10k a year for gardening)

- being forced to accept sell the off of land / liens

And that's just for blocks of flats.

If you are looking at leasehold houses, check out the following link for how your life can be made that bit more difficult by the freeholder:

http://www.sheffieldforum.co.uk/showthread...light=leasehold

And to extend the lease, the price goes up exponentially as the term gets shorter. E.g. to buy a freehold, those with a 50 year lease pay ~ 10 - 20 times those on 150 yr leases.

Avoid.

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I thought most flats were leasehold.

150 years sounds OK. We bought one with a 60 year lease once and it was more difficiult to sell after 4 years.

Regarding the freeholder, they vary so much. We had one who owned some of the flats in the block as well as the freehold on the block of 60 flats. They were a nightmare with charging excess works which invariably included doing up their own flats.

Local authorities can be OK you just need to make sure that your surveys and searches pick up any work likely to be done in the future. If you live in the property (ratehr than rent it out) they sometimes let you spread the costs over a number years.

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Leases may contain convenants requiring you to do stuff like repaint every 3 years, not keep pets, etc. It detracts from owning your own place if you can't do what you want.

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