|
Whether
you are Buying, Building or Planning Alterations to a
Residential or Commercial property or need advice on
lease extensions or Right to Manage we can provide a
wide range of services to assist you.
Valuations and
Negotiations for Lease Extensions and Purchase of
Freehold Interest (Collective Enfranchisement)
Legal
Background:
There are two rights for long leaseholders both of
which are contained within Part 1 of the Leasehold
Reform, Housing and Urban Development Act 1993 as
amended by the Housing Act 1996 and the Commonhold &
Leasehold Reform Act 2002.
The first right is a group right for leaseholders
of flats to purchase the freehold interest of the
building in which they reside subject to certain
qualifications. The second right, is for the
individual lessees to renew their lease which, in
effect, adds 90 years to the unexpired term of the
existing lease.
For the lease extension, the 2002 Act has abolished
the previous residency test and the property now has
to be owned by the qualifying tenants for a period of
at least 2 years before a claim is made. It has also
abolished the low ground rent test and also provides
for the valuation date to be fixed at the date of the
claim. There is no marriage value where the unexpired
lease term exceeds 80 years. Otherwise, the marriage
value is fixed at 50:50.
The calculation of the premium to be paid for lease
extension is set out in Schedule 13 part II of the
Leasehold Reform, Housing and Urban Development Act
1993 and is a total of:
a) The diminution in value of the landlord's interest
in the flat,
b) The landlord's share of the marriage value and
c) Compensation for loss arising from the grant of the
new lease.
The marriage value is the potential for increase in
the value of the flat arising from the grant of a new
lease and the 1993 Act requires that the "profit"
should be shared between the parties.
Services Available:
We are able to provide clients with one or more of
the following: the provision of a preliminary report,
valuation and advice to enable the client or
qualifying tenants to take a decision as to whether
they are eligible, capable of, and wish to exercise
their rights;
-
the provision of valuation advice as to the amount(s) of any offer or counter-offer that should be
included in any notice or counter-notice;
-
the undertaking of associated negotiations on
behalf of the landlord, or on behalf of the
participating tenants or nominee purchaser;
-
the preparation and provision of expert evidence
to a Leasehold Valuation Tribunal (LVT) or the Lands
Tribunal.
For general information, advice and background to
the legislation involved please visit the
Leasehold Advisory Service website.
Surveys & Valuations:
There are two main types of survey, a Homebuyer
Survey and Valuation (HSV) and a Building Survey.
Mortgage valuations
A valuation isn’t a survey. It’s a limited check on the
property that your mortgage lender carries out to ensure
it’s worth the money they’re lending you. They’ll
probably ask you to pay for the valuation. Many lenders
provide a copy of the mortgage valuation to the buyer
but it is unlikely to cover items of detail which would
be picked up in a survey.
However, there may be structural problems in the
property that would cost a huge amount to put right –
and they won’t appear in the valuation report. Which is
why it’s really important you have a survey. An RICS
member is fully qualified to carry out a more detailed
survey, before you buy your home.
Homebuyer Survey and Valuation Report
A Homebuyer Survey and Valuation (HSV), also known as a
Homebuyer’s Report, is a survey done to a standard
format set out by RICS – it’s most suitable for
conventional properties built within the last 150 years,
which are in reasonable condition.
It doesn’t detail every aspect of the property, and only
focuses on urgent matters needing attention. It’s not
usually suitable for properties in need of renovation,
or if you’re planning major alterations.
An HSV includes details of:
-
The general condition of the property
-
Any major faults in accessible parts of the building
that may affect the value
-
Any urgent problems that need inspecting by a
specialist before you sign a contract
-
Results of tests for damp in the walls
-
Damage to timbers – including woodworm or rot
-
The condition of any damp-proofing, insulation and
drainage (though drains aren’t tested)
-
The estimated cost of rebuilding the property after a
fire, for building insurance purposes
-
The value of the property on the open market.
Building Survey
A Building Survey is a comprehensive inspection of a
property. It’s suitable for all properties,
especially:
-
Listed buildings
-
Older properties,
-
Buildings constructed in an unusual way, however old
they are
-
Properties you plan to renovate or alter in any way
-
Properties that have had extensive alterations.
It examines all accessible parts of the property – and
you can ask to have specific areas included, so it
covers any particular concerns you have about the
building.
A Building Survey includes details of:
-
Major and minor defects and what they could mean
-
The possible cost of repairs
-
Results of damp testing on walls
-
Damage to timbers – including woodworm and rot
-
The condition of damp-proofing, insulation and
drainage (though drains aren’t tested)
-
Technical information on the construction of the
property and the materials used
-
The location
-
Recommendations for any further special inspections.
Building Survey doesn’t include a valuation, but your
surveyor can provide this separately if you need one.
Having an independent and comprehensive survey by an
RICS member makes good sense – and could save you
thousands of pounds in repair bills. |
