Will Your Lease Stop You Selling Your Home?

Author:
Robert Godfrey
Partner, Head of Professional Negligence and Dispute Resolution
Date:
12/02/2019

For many people in the UK, buying a house will be the largest financial purchase they ever make.

So what can be worse having bought a leasehold property than discovering there are clauses in the lease which may make your home less likely to sell and be worth less than what you paid?

This is the scandal surrounding leasehold properties and various onerous clauses in leases.

If you find yourself in this situation, you may have a potential claim against the Solicitors who you instructed to handle the purchase of your property. For free legal advice get in touch with our Professional Negligence Solicitors.

Call us on 08002605010 or request a callback and we will help you.

Leasehold Properties

Effectively a leasehold property is not yours to own for the rest of your life, unlike a freehold property. Although you may have paid a considerable amount of money buying the house, the reality is if it’s a leasehold property, you’re simply renting it for the period of the lease. So on expiry of the period, the house will return to the freeholder, who is simply the landlord and you have nothing to show for the money you’ve spent.

Leasehold is common in flats but not necessarily in houses. More importantly, over the last 15 years or so, we have witnessed a dramatic change in the clauses contained within the lease.

A lease will contain a number of duties on both the freeholder and you as the leaseholder. However, there are now commonly found clauses which are simply an opportunity of extracting money for no beneficial return from you.

There are the obvious ground rent clauses which, rather than starting off at a modest rate and possibly increasing over time on a limited basis, are starting off at very high rates and doubling every 10 or so years. These are well publicised in the press. However, there are also clauses which prohibit the way you use and enjoy your property.

It isn’t uncommon to find the following:

      • That the exterior of the property has to be decorated every 4 years
      • That you cannot keep pets without obtaining prior permission from the freeholder
      • You cannot change the doorbell or the front door furnishings without permission
      • You cannot build a garden wall around the front of the property.

Not only do these clauses limit your enjoyment of the property to make changes as you please, but if breached, could lead to the forfeiture of the property. Imagine the impact that would have on your life.

Although it’s accepted a number of these clauses, although providing a restriction, can be overcome by simply applying to the freeholder for permission, in doing so there will be an administration fee to pay to them. But for what purpose is the fee levied? In truth, no reason at all – it’s simply another way to extract money from the unsuspecting leaseholder.

Even those who wish to exercise their statutory right to buy the freehold after 2 years may find that simply enquiring about this right, and the cost involved, will incur a fee. Again, for what exactly? The trouble, of course, is once these clauses are identified to a prospective buyer of your lovely home, they may well be put off and you suddenly find people have no interest in your property.

Alternatively, they may reduce their offer to take account of the overall cost they may face if they take on the property. So suddenly, the house isn’t worth what you thought it was.

These are things which are rarely explained by the Solicitors. Commonly, the Solicitor may simply refer the client to the various schedules within the lease and tell them to read them. A lease is a complicated document, as are most legal documents, and without clear guidance and explanation, the unwary will fall foul and find they have invested in a diminishing asset.

For free legal advice call our Professional Negligence Solicitors

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