LVT7 Residential Tribunal Service form issued.

[Dajstar]

We inherited our late Grandads house a while back which is leasehold , theres 34 years left on the lease.
We was planning to do the house up ourselves and live in it.

The land owner wanted us to pay £20,000 for the land (which is approx 20meters long and 10 metres wide - with the house sat in the middle).

We offered £10,000 , he said no but he'd sell for £15,000
We said no cannot afford no more than £12,000 , he then offered us £10,000 for the house which we declined - an insult to our intelligence !

Then we changed our mind and didn't want to do it anymore instead look for a new house altogether, in the meantime he offered the land to us for £13,500 but we'd already decided not to go ahead and so told him we may put the house up for auction.

The house needs remodernising but is structually sound, we had a reputible builder round to price it up during the time we was negotiating the price for the land , he saw no problem with the place or the job in hand if it was to go ahead.

Next thing a neighbour on the same street came along who is also a builder and wanted to buy the house to do it up and live in , we agreed a price for the house in it's current condition and told him the land owner was willing to let us have it for £13,500.

The guy went away had a surveyor round and got himself a mortgage on the property.
The next thing is we get a letter through the post from the Residential Tribunal Property Service telling us the land owner is doing us for breach of terms of the lease because the house has not been maintained to a standard that our Grandad signed up to 70 years ago !!

Right up until now the land owner has knew nothing about the person wanting to buy the house off us , but this tribunal thing has come to the fore.

We are hoping that the deeds will be transfered into the potential buyers name and the sale of the house can go ahead.

What benefit would it be to the land owner if we had to pay for any required repairs , or what is he trying to achieve here ??

If anyone has any idea which way this could go i would appreciate any opinions.

Many thanks

Concerned.

[bednobs]

What does he gain from it? Well, for a start it probably seems like a better idea to purchase the land from him now doesn't it? And you can bet he wont offer it for £13500 now!

[bednobs]

and basically you are buggered if you don't buy the land

[Dajstar]

He has a buyer for the land for £13,500 if he wants to , but if he makes us pay for any repairs then all we will do is take the house to auction where he stands to lose out financially if someone buys it for cash an just rents the land off him for pittance !

[bednobs]

but taking a long term view, in 34 years time whoever owns the house will HAVE to buy the land won't they? You also might have trouble selling it with so little left on the lease if he decided to get arsey

[Dajstar]

Yes i'm aware of that but what is of more financial interest to him now is that he can sell the land for £13,500 , the house is the only one left on the street that is leasehold and he was keen not to let it go to auction , the land was only being rented for £8 per year !! i know he can put that up but i'm sure taking £13,500 now and wiping his hands of it must be in his best interest.

[buildersmate]

So you now should have worked out the answer to your own question - he's doing it because the land is worth a damn sight more money than £13500 and if he can find a way of oiking you out, rather than a builder (who also understands about land values ) getting hold of it, he makes money on the deal.

Beats me why you didn't seek advice - there's plenty of free advice from an organisation like this - the Leasehold Advisory Centre - a Government-funded body with no axe to grind.
http://www.lease-advice.org/

[bednobs]

why? perhaps it's his retirement fund. After all, he'll be able to hold the house owner to ransom later probably. They are not making any more land!

[Dajstar]

The land is not worth the £13,500 never mind £20,000 !! We have been advised that already , we simply couldn't afford the asking price so changed our plans , seeking advice wasn't an issue until he throws the tribunal thing into it , we was simply wanting to pay a reasonable price for a small bit of land and then do the house up .
Oh and for the record he won't be alive in 34 years time that i can say for a fact .

[buildersmate]

"The land is not worth the £13,500 never mind £20,000"
If you say so. Its just that there are few plots of land within urban areas in any parts of the UK where the value is that low. And if this house is sitting in the middle of an area ripe for redevelopment where everything else has already gone, then I'm more than mildly surprised.

I remain convinced that he's using a legal process to try to demonstrate that you are in breach of the terms of the lease in order to regain possession of the lease - before a builder who understand the true potential of this land can get his hands on it.

[buildersmate]

Oh and for the record, the freeholder's date of eventual death is somewhat irrelevant - he has heirs somewhere, I'm sure.

[Dajstar]

The house is a semi detatched property 70 years old in the middle of a built up street in a built up area , not in an area ripe for redevelopment , it's the last on the street that is leasehold , the bloke was quite prepared to drop the price down to £13,500 without hesitation but we had already changed our plans by then, It's in the hands of solicitors anyway but i'm just trying to gauge some opinions because these things drag on for so long the whole thing gives us a headache.
We have only inherited the property and it's responsibility's so i'm hoping there are some human beings who work within these tribunal services , the house was left to us by a 97 year old man who lived alone and could not afford to buy the land himself.

[buildersmate]

When you said it was an only house left in the street leasehold I assumed all other houses had already been demolished :).

Fair enough, so it is a decent SD house, in an established area of a town/city. Are you prepared to tell us what similar freehold houses in the area sell for? - I can't believe there isn't value to be created by whoever either buys the freehold (as a leaseholder) or cancels the lease (as a freeholder).

There can't be many parts of the country where a freehold pre-war semi doesn't hit six figures.

[themas]

1. I find it almost incredible that anyone got a mortgage on a house with only 34 years to run on the lease. Mortgage lenders normally won't look at anything less than 60 years remaining.

2. Valuing the lease for purchase is a skilled process which - if it is to be done properly - has to be carried out by a specialist surveyor/valuer. Unless you have had this done you cannot say with any confidence that "The land is not worth the £13,500". I suspect both you & the freeholder have attempted to haggle without such specialist knowledge. Buildersmate has pointed you to the right website to get real knowledge.

3. If you are now to go to a Tribunal you would be well advised to get some proper professional help. It will cost you, but may well be cheaper in the long run. It may be that the freeholder's claim can be rebutted (I've known of a case where a somewhat similar claim was made & about 95% of it was then knocked down) but you're unlikely to succeed in doing this if you go into it without the necessary knowledge & experience.

4. You could very well find you can't sell at auction at anything other than a ridiculous price because of the mortgage problem & whatever liaiblity you are left with from the tribunal decision. If you want a proper market price you need to sort these issues out yourself first. Hindsight is a wonderful thing, but I guess you realise now that the best approach would have been to agree the £13500 (even if it meant getting a short term bank loan) & then to sell with a freehold in place.

[EDDIE51]

Have to agree with buildersmate, a free hold large, pre war semi is going to be worth ai least £350,000 , a lot more in many parts of the country. Near me it would be £500,000- £750,000

[bednobs]

perhaps he wants you to take the house to auction so he can buy it for a very small price - there might not be muh interest in a house with 34 year lease and a reluctant land owner

[Dajstar]

The £13,500 was out of our depth even with a bank loan , and the potential buyer has got a mortgage to include the £13,500 to buy the land so the issue of the 34 years left is irrelevant .
Eddie51 ... Jesus Christ where do you live pmsl !!!!
These pre war semi's are going for around £100,000 in good nick where we live , this particular one we are selling for £40,000 and then the land price is seperate to that.

[EDDIE51]

just outside Cambridge , you couldn't buy a garden shed for £40,000 around here. Excouncil 3 bed terrace are going for £120,000.