Many purchasers of leasehold homes across High Peak have told me they feel they are not getting a fair deal when they attempt to purchase the Freehold to their property.
As your MP, I have met with dozens of homeowners and am helping to co-ordinate information and action, locally and in Parliament.
Can I buy my Freehold?
Leaseholders have the legal right to buy the freehold of their property after 2 years. Sometimes freehold owners will offer them to leaseholders before the 2-year qualifying period has passed e.g. the company which has bought the Beckets Brow freeholds have indicated that they are willing to sell before 2 years have elapsed.
How much will my Freehold cost?
Once the 2-year qualifying period is reached a leaseholder can buy the freehold. The company which owns the Freehold will inform you how much it will cost you to buy it at that time. The amount quoted can vary widely over time and depends on when your lease was granted and which legislation covers the basis of valuation.
Can I challenge the cost of my Freehold?
The purchase price can be fixed by agreement between the parties and, in the absence of agreement, by the Residential Property division of the First-tier Tribunal (Property Chamber) in England. There is no deadline for applying to the tribunal to determine the purchase price. However, it is not possible to apply before the earlier of the following:
- The landlord advising the tenant of the purchase price it is asking.
- Two months after service of the notice of tenant’s claim where the landlord has not advised the tenant of the purchase price.
If both parties cannot agree the price so that the First-tier Tribunal determines the price, the tribunal will make its own independent decision on valuation, although the landlord and the tenant should still submit expert valuation evidence to it.
The valuation basis for determining the purchase price is set out in the legislation and will depend on whether the tenant has the right to enfranchise by virtue of the original requirements of the Leasehold Reform Act 1967, or through the relaxation of the requirements under the subsequent amending legislation. Generally speaking the later the enfranchisement right the more expensive the purchase price.
In a claim to buy the freehold, the tenant is responsible for paying the purchase price and its own valuation, conveyancing and legal costs. The tenant is also responsible for the reasonable costs of the landlord for the following:
- Investigating the tenant’s right to acquire the freehold.
- Valuation costs. Often, the landlord’s valuer will also be conducting the negotiations on behalf of the landlord. The negotiation costs are not payable by the tenant and should be clearly distinguishable from the valuation costs on any invoice.
- Conveyancing costs.
Generally, the tenant is responsible for these costs of the landlord whether or not the purchase completes.
Will the Government change the law for Leasehold Houses?
In July, the Government launched a consultation on preventing the sale of houses by leasehold, except in special circumstances. When the consultation closed on 21st September the Minister tweeted: “Over 6,000 responses to our leasehold consultation. Reflects public strength of feeling. Govt will act.”
However, the consultation does not seek to help existing leaseholders to purchase their Freehold. My colleague, Justin Madders MP, has therefore launched a Bill to create a formula for the valuation of a freehold:
A Ten Minute Rule Bill is very much a preliminary stage in legislation and would have to be adopted by Government in order to have a chance of becoming law. We are hoping that by preparing and presenting the legislation as a workable solution, that the Government will include it in their response to their consultation.
When will the Government report what action they will take?
Government understand the need to act as soon as possible, and I pressed them on this in Parliament at the end of October. They are still saying they will make an announcement ‘in due course’. I hope we will see a report of what they will do before Christmas , but if not, then it should be early in the new year.
What if the Government won’t take action for existing leaseholders?
If the government refuse to take action to help existing leaseholders, there will be an outcry – from me and many other MPs who feel their constituents are being hard done by.
I and colleagues from all parties will continue to press for them to legislate for a fair formula to buy the Freehold of a house, however this is unlikely to achieve an outcome quickly.
Residents who are keen to buy their Freehold as soon as possible may wish to look at clubbing together with their neighbours to get valuations of their Freeholds and to share legal costs.
Complaint to Barratts Homes
In the meantime, I am writing to Barratts on behalf of residents of Octavia Gardens and Beckets Brow who feel they were misled over the cost and complexity of buying their Freehold, and who are aggrieved that their Freehold was sold to another company without giving the leaseholders the opportunity to purchase it.
Please send me an email by 28th November if you feel that you were misled over the sale of your property on leasehold so that I can put together the most effective letter – please let me know what you were told by the Sales Team about your lease and ability to buy your Freehold. Do send me a copy of any letters or written information you were given about it (a scan or photo is fine).
If you live on another estate and feel that you were also misled over your sale, please let me know by email to firstname.lastname@example.org
Residents on Beckets Brow have formed a Facebook Group to discuss issues with their Service and Maintenance Contracts, and a WhatsApp Group to discuss their leasehold issues.
Let me know if you are on that estate and would like to join, or if you are on another estate and would like to set up a group with your neighbours and I will put residents in each estate in touch with each other if you agree to chare contact details.u
The Leasehold Knowledge Partnership (LKP) is a charity which “aims to help leaseholders, publish authoritative editorial and campaign for legislative and regulatory changes.
“If you are a leaseholder needing advice, please feel free to contact us.
“LKP provides no paid services whatsoever – although if we have provided assistance you are welcome to make a donation.”
Their website contains all the latest news on the leaseholding campaign, and advice for leaseholders:
LEASE: The Leasehold Advisory Service.
An independent advice agency for leaseholders, landlords, professional advisers and others dealing with the law affecting residential leasehold property. The site includes the texts of detailed advice leaflets on statutory rights to enfranchisement (including collective enfranchisement) and lease extensions, decisions of the Leasehold Valuation Tribunal and a number of reports on commonhold and leasehold reform.