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I'm the executor of an aunt's will. She left a house, which I'm in the process of selling and its leasehold. Annual ground rent around £50. Its a 99 year lease with 66 years left.
I understand there's a formula for establishing the cost of buying the freehold if you've been there for 5 years or so. She was there about 15 years.
But as she died in August, can I, as executor, still exercise that right?
the leaseholder
to be a qualifying tenant must be the leaseholder of the house at the time of application and have held the lease for the past two years. In addition, [b]where a leaseholder who is eligible for the right to the freehold dies, his personal representatives will be so eligible and may serve a notice for purchase within a period of two years from the grant of probate or letters of administration[/b]. -
http://www.lease-advice.org/publications/documents/document.asp?item=15
use a yield of about 6% when you do the calculation.
Thanks for that. Looks like about 5 hours of reading to see what its going to cost.
BTW - this was a genuine question - not some feeble attempt to see just how obscure a question has to be in order to stump the STW massive 8)
to help you, here's step by step:
1) calculate the value of the next 66 years rent (i.e. Year's Purchase 66yrs at 6% of £50pa):
=(1-(1/(106%)^66))/6% x £50
= £815
2) Calculate the value of the land at the end of the current lease
Rough and ready, say 40% of today's value if the house and land were sold together, say £250k, but you use your own number.
= £100,000
3) What is the present value of that £100,000?
PV @ 6% for 66 years =(1/(106%)^66)
X £100,000 = £2137
total value of freehold =
£815 + £2317 = c£3k.
That will move a round depending on the yield you use and the value of the land.
Yield is an approximation. You can have a go at guessing a property price, but the 40% is a wild guess.
This is just for methodology DONT USE IT AS ADVICE!
stoner - out of interest are you a valuer who specialises in this?
Don't you need to include for marriage value as well?
stoner - out of interest are you a valuer who specialises in this?
No!
So dont take it as advice or the RICS cut my goolies off.
aP - depends on the valuation method that the enfranchisement falls into. Im assuming the original value method not the special method
DELETED !!! I WAS TALKING RUBBISH
sargent - he's talking about a house, not enfranchising a block.
And I think we can assume that he's going to get proper advice in due course. There's nothing wrong with helping with some of the methodology.
Its not a dark art (much as lawyers would love everyone to belive such thing are)
my mistake - 67 Act then.
Ignore me! Wish I had read that properly!
Re valuation I'll stay out of that!!!
Oh gawd, what have I started???
Yes it is a semi-detached house that we expect to sell at £145k.
Thanks for everybody's assistance, and yes, I will only be using the answers as a guide to where to look, I know it's not "advice".