This article by the BBC highlights the need for all parties to a property transaction (whether residential property or commercial property) to take time to understand what is being transferred and on what terms. Generally, solicitors are not there to provide investment advice to their clients, but it is important that individuals and businesses understand the potential legal ramifications of a leasehold arrangement including break clauses, service charge, ground rent, rent review clauses and the costs of obtaining licences to alter if you want to carry out works to your leasehold property.
For instance, in the example from the video linked to the article, the ground rent due on a flat over the course of the 190 year lease totaled over £1.3 billion despite the leasehold interest in the flat only costing £150,000. This resulted from a fairly unusual provision which doubled the ground rent every 10 years, meaning that the ground rent due grew exponentially over the term of the lease. However, the long term effect of any rent review clause should always be discussed with your solicitor, regardless of the current level of rent due.
If your solicitor is not willing to discuss this with you as part of their retainer, you must seek advice from a solicitor who will, regardless of whether they have been recommended, approved or suggested by the developer, seller or your mortgagee.
When putting pen to paper to buy a new home, most people expect to know how much they will need to pay to own it outright. But thousands of families in England and Wales are discovering the new-build houses they bought are not all they seemed.
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