Property auction advice

[Madron]

We've seen a property we are interested on an auction site.
Downloaded the legal pack and had a quick shufty through all the blurb.
In the contract, at the end 2 things appeared that concerned us..


68 RE LACK OF LEASEHOLD INFORMATION: The Seller does not hold any Leasehold
Information for the property. This has not been provided by the registered Freeholder. The
buyer hereby acknowledges that the property is sold in the absence of this information and
shall raise no requisition or objection following exchange of Contracts with regard to the
lack of Leasehold Information

Does anyone know what ramifications this could have ?

Neither of us are particularly knowledgeable in property matters and would obviously get the legal pack dissected by a solicitor before proceeding. TIA

[CUSSIE01]

Only ever at one auction when a relative bought a house, quite stressful so I’d recommend going to a couple beforehand if possible. This is the only reference lo leasehold I could find so better to get your solicitors advice first. Good luck

The auction house will prepare a legal pack for the property, which includes things like the title deeds, searches, seller’s property information form, fittings and contents list, and the leasehold information form and the management pack if the property is a flat. They don’t always include the management pack with leasehold properties – and this could potentially be a red flag. If the pack is available, you should instruct a solicitor to look over it before you go to auction, to advise you of any onerous covenants, loopholes, length of term and anything else that could change your decision to make a bid on the property.

[DDB220]

We've seen a property we are interested on an auction site.
Downloaded the legal pack and had a quick shufty through all the blurb.
In the contract, at the end 2 things appeared that concerned us..


68 RE LACK OF LEASEHOLD INFORMATION: The Seller does not hold any Leasehold
Information for the property. This has not been provided by the registered Freeholder. The
buyer hereby acknowledges that the property is sold in the absence of this information and
shall raise no requisition or objection following exchange of Contracts with regard to the
lack of Leasehold Information

Does anyone know what ramifications this could have ?

Neither of us are particularly knowledgeable in property matters and would obviously get the legal pack dissected by a solicitor before proceeding. TIA

Do a land registry search. You will need to create an account. When you search on the address it will provide the details of who owns the Freehold and how long the leasehold is. I would not buy anything with less than 100 years unless you are looking for a quick flip.


The price of a property is affected once it drops below 100 years. Although if you have the Freeholders details you can either negotiate to extend the lease or buy the freehold.

The best bargains in auction are properties with a short leasehold. But before you commit you need to contact the freeholder and get a contract agreed to extend the leasehold.

Often Freeholds are held by trusts - you may have to make a lot of enquiries, but it might be worth it.

Another useful tip is to create an alert account on land reg. this is free for up to 10 properties. You will get an email notification of other parties carrying out a search on a specific property. This is useful to let you know the level of potential interest.

[PhoenixUnited]

Do a land registry search. You will need to create an account. When you search on the address it will provide the details of who owns the Freehold and how long the leasehold is. I would not buy anything with less than 100 years unless you are looking for a quick flip.

The price of a property is affected once it drops below 100 years. Although if you have the Freeholders details you can either negotiate to extend the lease or buy the freehold.

Sound advice and in the end analysis, if there is any gap in the information or there is any flicker of doubt in your mind step away and move on. Plenty of fish and all that

[Madron]

Thanks for replies

Cussie-Thankfully you don't have to attend the auction ,the auctioneers can do any bidding for you.



The Freeholder, still named on the registry ,bought the property 20 years ago and quickly changed it into 3 leased flats(999 years), one of which his parents lived in.

In 2018 RPA (debt collectors) put a charge on the property. I assume it was repossessed and now Santander want their money back.

One of the flats was sold earlier this year.

The Seller (Santander) haven't received any of the leasehold info. Not sure how thats possible legally. How does that affect things going forward ,like future mortgages ?



The second thing that concerned us was-



69 RE ARREARS: The Buyer acknowledges that there may be outstanding arrears payable for the property. The sale transaction is subject to all and any outstanding arrears. It is hereby agreed that the Buyer shall be responsible for and accept liability for all sums payable for the property for the periods prior to and after the completion date. For the avoidance of doubt, the seller shall not be required to hold any retention beyond the completion date in respect of the sums payable. Neither the Seller nor the Seller’s Conveyancer nor any person acting on the seller’s behalf shall incur any personal liability whatsoever whether arising directly or indirectly under this contract or under any lease, deed, instrument or document entered into, under or in connection with it.

Not sure what that is all about.



Normally I might give up on this but we've both taking a real liking for the place and could turn out to be a bargain.

[CUSSIE01]

Thanks for replies

Cussie-Thankfully you don't have to attend the auction ,the auctioneers can do any bidding for you.



The Freeholder, still named on the registry ,bought the property 20 years ago and quickly changed it into 3 leased flats, one of which his parents lived in.

In 2018 RPA (debt collectors) put a charge on the property. I assume it was repossessed and now Santander want their money back.

One of the flats was sold earlier this year.

The Seller (Santander) haven't received any of the leasehold info. Not sure how thats possible legally. How does that affect things going forward ,like future mortgages ?



The second thing that concerned us was-



69 RE ARREARS: The Buyer acknowledges that there may be outstanding arrears payable for the property. The sale transaction is subject to all and any outstanding arrears. It is hereby agreed that the Buyer shall be responsible for and accept liability for all sums payable for the property for the periods prior to and after the completion date. For the avoidance of doubt, the seller shall not be required to hold any retention beyond the completion date in respect of the sums payable. Neither the Seller nor the Seller’s Conveyancer nor any person acting on the seller’s behalf shall incur any personal liability whatsoever whether arising directly or indirectly under this contract or under any lease, deed, instrument or document entered into, under or in connection with it.

Not sure what that is all about.



Normally I might give up on this but we've both taking a real liking for the place and could turn out to be a bargain.

If I was buying a house or flat I’d def want to be there,, very interesting process watching it all unfold. A family member bought a house at auction without title deeds for a bargain and was lucky to get it all sorted hassle free but there seems a lot of red flags with that one.

[Madron]

If I was buying a house or flat I’d def want to be there,, very interesting process watching it all unfold. A family member bought a house at auction without title deeds for a bargain and was lucky to get it all sorted hassle free but there seems a lot of red flags with that one.

600 mile round trip and quite a few quid- no thanks

[Madron]

Had a solicitor look at the legal pack and he gave us the virtual go ahead .

Learnt a lot in the following 2 weeks , going to see my bank, mortgage brokers and solicitor. etc and a lot of online work.to try to sort out finances to make sure we would have the cash available (obviously no mortgage) to pay within the 14 day time period from the auction. Learning that it wasn't as straightforward as I thought it would be ,was very stressful. You can't just borrow the money from anyone without having to prove where it came from. Some of my siblings promised to'gift' me some funds.
I was going to bid online and registered for that but I imagined a connection failure at just the wrong time ,which would have been devastating. So I decided the safest way would be to go to the auction live.
Anyway up at 4 yesterday to get the train to London (what a horrible place that is nowadays) after a surprisingly deep 6 hours of solid sleep, which hasn't been very good recently ,
Arrived at the auction, then had to wait 5 hours for our lot to come up. I had to keep going outside into the cold wet street as it was so warm in the building, not sure why the heating is on so high.
Bidding was short and sweet , me and an onliner (1 i think) .Started low ,but quickly gathered pace, my paddle was up in the air before the auctioneer could get the words out and the response from the other bidder seemed to take longer and longer with each bid. I knew we had him.
The hammer seemed to take forever .
What a feeling . Buzzing.

30k less than our limit. Couldn't believe it. And ,we didn't need to borrow a penny.
Sorted out the paperwork quickly, then made a mad dash to Paddington to just about get there in time for my booked return journey (first class no less). Lovely journey back with a smile on my face all the way.
The wife was waiting at the door when I got home for a massive hug. I was exhausted.
We had both set our hearts on the property after we went to see it a fortnight earlier. Ticked all our boxes
We are both over the moon.

Not recommended though for those with a nervous disposition.

[BradWhite]

I might be barking up the wrong tree here but I saw something on YT a while ago that a couple bought a run down penthouse in London at a very reduced price because the place needed a lot of work and the 99 years hold on it had reduced to down to 20 years or so which reduces the over all property value no matter if fully renovated or not.
I had no idea this happened, but it was London.

They paid to get that hold renewed back to a 99 year hold, it cost so many thousand per decade to bring the property to the real market value.
The more time on the leasehold the more value, I don't know if free hold properties in certain parts are only free for a period of time.

I think the money went to the council or even the crown.

I wondered why it was not transparent in the sale agreement/contract.

[CUSSIE01]

Had a solicitor look at the legal pack and he gave us the virtual go ahead .

Learnt a lot in the following 2 weeks , going to see my bank, mortgage brokers and solicitor. etc and a lot of online work.to try to sort out finances to make sure we would have the cash available (obviously no mortgage) to pay within the 14 day time period from the auction. Learning that it wasn't as straightforward as I thought it would be ,was very stressful. You can't just borrow the money from anyone without having to prove where it came from. Some of my siblings promised to'gift' me some funds.
I was going to bid online and registered for that but I imagined a connection failure at just the wrong time ,which would have been devastating. So I decided the safest way would be to go to the auction live.
Anyway up at 4 yesterday to get the train to London (what a horrible place that is nowadays) after a surprisingly deep 6 hours of solid sleep, which hasn't been very good recently ,
Arrived at the auction, then had to wait 5 hours for our lot to come up. I had to keep going outside into the cold wet street as it was so warm in the building, not sure why the heating is on so high.
Bidding was short and sweet , me and an onliner (1 i think) .Started low ,but quickly gathered pace, my paddle was up in the air before the auctioneer could get the words out and the response from the other bidder seemed to take longer and longer with each bid. I knew we had him.
The hammer seemed to take forever .
What a feeling . Buzzing.

30k less than our limit. Couldn't believe it. And ,we didn't need to borrow a penny.
Sorted out the paperwork quickly, then made a mad dash to Paddington to just about get there in time for my booked return journey (first class no less). Lovely journey back with a smile on my face all the way.
The wife was waiting at the door when I got home for a massive hug. I was exhausted.
We had both set our hearts on the property after we went to see it a fortnight earlier. Ticked all our boxes
We are both over the moon.

Not recommended though for those with a nervous disposition.

Well done M, enjoy your new property. Have you much work to do or can you move straight in ?

[Madron]

Well done M, enjoy your new property. Have you much work to do or can you move straight in ?

Thanks Cussie.

Not much to do at all really, even the carpets are in v good condition.

Strange thing was our winning bid was the same amount we offered 2 weeks ago for a pre -auction sale.Could have saved us so much stress.

[CUSSIE01]

Thanks Cussie.

Not much to do at all really, even the carpets are in v good condition.

Strange thing was our winning bid was the same amount we offered 2 weeks ago for a pre -auction sale.Could have saved us so much stress.

Was only at one property auction & loved the whole process but I wasn’t the one bidding so no stress.

[Ellandback1]

We've seen a property we are interested on an auction site.
Downloaded the legal pack and had a quick shufty through all the blurb.
In the contract, at the end 2 things appeared that concerned us..


68 RE LACK OF LEASEHOLD INFORMATION: The Seller does not hold any Leasehold
Information for the property. This has not been provided by the registered Freeholder. The
buyer hereby acknowledges that the property is sold in the absence of this information and
shall raise no requisition or objection following exchange of Contracts with regard to the
lack of Leasehold Information

Does anyone know what ramifications this could have ?

Neither of us are particularly knowledgeable in property matters and would obviously get the legal pack dissected by a solicitor before proceeding. TIA

I was an estate agent for 20 years. What kind of property is it?

[Ellandback1]

Buying a leasehold property is fine, but as stated the length of the lease is important.

You can renew the lease at anytime, but only after you've owned the property for 2 years.

The lower the years left on the lease, the more its going to cost to renew it.

Once a property has 80 years remaining, you should look to renew it. Depending on the freeholder, the lease can be renewed to 99 years, 125 years or 999 years (also called a share of the freehold).

The Freeholder cannot stop you from renewing the lease as long as you have owned the property for 2 years.

The calculation is automatically set by the numbers of years left on the lease, but the calculation goes up significantly if it has less than 80 years, and climbs steeper every year - this term is called 'marriage value'.

Once a property has 65 years remaining on its lease (depending on the lender) it becomes unmortgageable, meaning a buyer would have to pay cash for it, or the owner would need to splash out circa £50k to get the mortgage renewed, apposed to £5k if the property had 80 years remaining.

Auctioneers who have not seen the title deeds will put disclaimers like the one Madron highlights in his opening post.

If anyone needs any help with any of this, they are free to call me!!!!

[Madron]

I was an estate agent for 20 years. What kind of property is it?

.

Ground floor flat (with garden f&b

[Ellandback1]

Had a solicitor look at the legal pack and he gave us the virtual go ahead .

Learnt a lot in the following 2 weeks , going to see my bank, mortgage brokers and solicitor. etc and a lot of online work.to try to sort out finances to make sure we would have the cash available (obviously no mortgage) to pay within the 14 day time period from the auction. Learning that it wasn't as straightforward as I thought it would be ,was very stressful. You can't just borrow the money from anyone without having to prove where it came from. Some of my siblings promised to'gift' me some funds.
I was going to bid online and registered for that but I imagined a connection failure at just the wrong time ,which would have been devastating. So I decided the safest way would be to go to the auction live.
Anyway up at 4 yesterday to get the train to London (what a horrible place that is nowadays) after a surprisingly deep 6 hours of solid sleep, which hasn't been very good recently ,
Arrived at the auction, then had to wait 5 hours for our lot to come up. I had to keep going outside into the cold wet street as it was so warm in the building, not sure why the heating is on so high.
Bidding was short and sweet , me and an onliner (1 i think) .Started low ,but quickly gathered pace, my paddle was up in the air before the auctioneer could get the words out and the response from the other bidder seemed to take longer and longer with each bid. I knew we had him.
The hammer seemed to take forever .
What a feeling . Buzzing.

30k less than our limit. Couldn't believe it. And ,we didn't need to borrow a penny.
Sorted out the paperwork quickly, then made a mad dash to Paddington to just about get there in time for my booked return journey (first class no less). Lovely journey back with a smile on my face all the way.
The wife was waiting at the door when I got home for a massive hug. I was exhausted.
We had both set our hearts on the property after we went to see it a fortnight earlier. Ticked all our boxes
We are both over the moon.

Not recommended though for those with a nervous disposition.

Great work!!!!!! I should HAVE READ THIS POST FIRST!

[Madron]

I've seen some stuff about making it easier for leaseholds buying the freehold.
Why would anyone want the freehold without owning any of the leasehold flats ?
Would buying the fh be advisable and how much ,roughly ?

[Madron]

Great work!!!!!! I should HAVE READ THIS POST FIRST!

Horse bolted. but thanks EB
999 year lease.

[Madron]

One piece of advice I would give is for people to borrow money and pay it back on time to get a credit history.

We had no credit history for the last 15 years and we paid for it. Barclays didn' t want to know, even though I've been with them for 30 years personally and 17 years with our business. Absolutely disgusting and we weren't asking for much ,considering our savings.
The bastards just want your money with absolutely zero customer relations. Robots.

[Ellandback1]

.

Ground floor flat (with garden f&b

Purpose built or conversion?