Legal Questions and Answers by
Jonathan Stones of John Barkers
Question :-
I've been caught up in one of those nightmare leasehold situations. My parents never
bought the freehold of their home. When my father died earlier this year, leaving the
property to my sister and myself, we wrote to the landlord enquiring about acquiring the
freehold.
He is asking £15,000, which we believe is pretty outrageous when the house is only worth
around £35,000.
I saw in the Evening Telegraph that the new leasehold law has been given the Royal Assent.
Will this help us?
Answer :-
One of the main effects of the new leasehold legislation - the Commonhold and Leasehold
Reform Act 2002 - will be to help people in your position, which is to say those
inheriting a property from parents or relatives who, for whatever reason, did not buy the
freehold during their lifetime.
The situation has been that, without a three-year residency qualification, you have no
rights to buy the freehold and for that reason the freeholder can demand whatever price he
wants. Indeed he does not have to sell it all, which makes things even worse.
I have known local cases in which landlords have asked for as much as £20,000 on a house
which would be worth £40,000 freehold.
When the new law comes into force - and that now depends when the order is made by the
Lord Chancellor - the family will have two years from the grant of probate to tell the
landlord that they wish to buy the freehold and he has to sell it to them.
If a lease is coming towards the end and there are not many years left, the price is still
not going to be cheap but least people who are unhappy about the landlord's valuation will
have the right to take the matter to the Leasehold Valuation tribunal and have it assessed
independently. In practice that is likely to make a considerable difference.
The new law introduces other changes, notably a reduction in the period that someone has
to reside in a property before they are entitled to but the freehold, down from three year
to two years.
The difficulty in your situation is that you have inherited the property before the new
law has come into force and therefore it does not immediately help you.
One option is to have the house transferred into the name or yourself or your sister and
to live there for the qualifying period, which under the new law will soon be two years.
At the end of that period you will have the right to acquire the freehold.
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