This property – the third – was supposed to be the lucky one. It was supposed to be mine! And to be honest I really did want this one, but I didn’t get it. Why? It’s another long story.
When I first lived in London over twenty-five years ago I lived in a shared flat on the Fulham Road. There were 10 of us; it wasn’t exactly private. Or quiet. We shared everything and it was CHEAP, which made living in London affordable on a very low salary. It was also a fantastic flat in a fantastic location; you could hear the Household Cavalry trotting off from the stables to exercise in Hyde Park a couple of times a week.
I lasted there three months and then moved to leafy Putney… And it always stuck in my mind that if I had the chance to buy a property on the Fulham Road, I would go for it.
So after the warehouse disaster, I started looking in the areas I knew and this little, tired, gem of a flat on the Fulham Road just called my name. It hadn’t had anything done to it since the 90’s, it was just waiting to be taken in hand (by me) and given a new lease of life. So what was the catch? HA – you figured that out already, did you?
It needed its lease extended.
And that was going to cost. The agent mentioned this at the first viewing, so I did know I was going to have to pay for this and the agreed purchase price certainly accommodated the lease premium. I was happy to take that on, but things unraveled really quickly.
Within the first week of my offer being accepted I discovered that the sellers hadn’t had a leasehold survey done. What is this? Well, its jolly expensive is the first thing I should say. It’s a report done by a surveyor to set the value of the lease premium in relation to the value of the property and others of the same ‘type’ in the same area. Essentially the premium compensates the freeholder/landlord for loss of earnings (ground rent) but does not factor in things like the general condition of the building and certainly not the decorative order of the property. What we found was that the premium we’d been told was likely to be asked was a fabrication – though not a million miles from what was an accurate value – just more than I wanted to pay for a building that needs a fair bit of TLC – because the moment I became a leaseholder, I too would have a share of those costs.
With the advice of the surveyor and my solicitor I asked the sellers if they would consider extending the lease in their name – if I increased my purchase offer to cover the premium – so that it would be transferred to me as part of the sale. That way the whole process would be ‘friendly’, they already knew the freeholders and it would be a simple conversation between them to get an agreed price for the extension. Or so I thought. They would only agree to doing this if I paid them a consideration – which they would split with me if the premium was less than what was agreed between us. Hmm. And then I got a really weird call from the agent to tell me that they could get more for the flat with the lease extended, if they remarketed it. Hang on, I was buying it, it wasn’t being remarketed. Was it?
From that moment things got nasty. The sellers refused to talk to the freeholder on my behalf, they would only allow us to start the lease extension after exchange of contracts – so at the point I owned the property and deposits had changed hands – and they kept pushing for me to agree to their terms. I got twice weekly phone calls from the agent, to see ‘how I was getting on.’ One of them left me shaking. So after three weeks of this I couldn’t take it anymore and withdrew my offer.
That was nearly three weeks ago and more pieces of the puzzle have revealed themselves, but the bottom line is that the sellers wanted more money for the flat than the market was prepared to pay. The place had been for sale since March of 2016 and they hadn’t accepted any offers before mine. Somehow in the process of accepting my offer they decided they would recoup some extra funds from somewhere. But how to do it?? Aha. Inflate the lease premium. Thing is they hadn’t done their homework.
If they had initiated the leasehold survey and agreed the price with the freeholder in advance, they could have added their little bit extra and no-one would have known. I’d never have questioned it because it would have looked like they were organised sellers, paperwork in order and all ready to go. But because the agent kept making ‘out of nowhere’ comments, I knew something was up. Every time he tried to coerce me into accepting the sellers terms he would mention that they could get more if they remarketed it.
In the end they got what they wanted, but the market is pretty uncertain right now; maybe it’ll be another year before they actually have it off their hands. And have I found another place to buy?