A Buyer’s Experience

We often now have prospective house purchasers joining our FaceBook group to find out more about estate charges. Some are happy to proceed after informing themselves of what they are taking on and some are not. With their permission we reproduce verbatim a post from a person who pulled out of buying a second hand “fake freehold/fleecehold” home.

Update to our case guys of buying a “freehold house subject to management company”(as this is exactly how they call it on papers and not just freehold full stop) , in order to help more people saving precious time, money, health, welfare and of course protect your own rights!!

First of all the solicitors made us aware of the 1£ rent charge from the management company, that makes them able to create a lease on the house. A lot of people may not bother, as it is only 1£, but that’s their guarantee to get rights on your property!! Even only with the existence of the words “rent charge 1£”. We should have understood from the beginning that those 3 words were all the point!!! And more importantly, the word “rent”. Who needs to pay any rent on his freehold property??

So, Our lender didn’t accept it of course and we had to make a deed of variation that says the MC has to give 2 months notice to the lender to act first and pay the costs.

We were still not happy with it, as we cannot get the idea of a 3rd party being able to put a lease on our freehold house.

And also our solicitor wrote on the report, which was sent to us only a few days before we decide the exchange date, that whilst this deed is sufficient for us and for the lender to proceed with the purchase, it will be questioned in every other future re-sale.

So, in order to protect our Rights and not get trapped in a fake freehold with 3rd parties being in the contract, we have just pulled out today and after that we received a very aggressive, offensive and bullying text from the sellers. Nobody has spoken to me like that before! I didn’t bother to answer! They thought that we new everything when we made the offer for the house. And honestly the only thing we new was how many bedrooms are in the house and how big is the garden!!Nothing else!!

So, we are the second buyers pulling out of the same house. I suppose the previous ones had the same issues, as we have heard 3 different stories from the sellers and the sales agency. They didn’t even agree to tell us the same story in order to believe it.

Glad and relieved from pulling out!! We don’t regret it!!

We have also asked this part of the rent charge to be removed or even redeemed(paying upfront for 100 years), but it is not redeemable for the estate rent charges, only for the historic rent charges.
So, they didn’t accept to remove it from the contract, as nobody else has asked for this before in this development of 360 properties. They wouldn’t bother doing it for us and risk it on becoming famous, so that other buyers can ask the same as well.

I feel sorry for the owners to be trapped in that house, but I wouldn’t like to risk it and get in their current position, not being able to sell it in the future.
It is pretty much a dead end!!

We are so glad we found this group that helped us starting searching for every single word of the contract in order to understand the hidden meanings between the words. We have spent a lot of hours reading and searching!!!

P.S. I have just discovered that the TP1 means Transfer of PART and not the whole property!!I had read the TP1 more than 10 times and I have just discovered this yesterday before we made our final decision. If that does really mean this, then it is all uncovered from the very first line on the top!!

We have been through all this whole stressful situation plus the bullying from sellers, but we woke up so RELIEVED today!!

A FaceBook post in our group mid January 2020

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One Reply to “A Buyer’s Experience”

  1. We also pulled out of a sale in Hampshire for the same reason, luckily we didn’t get very far in the process. As well as the rentcharge, we were concerned the property came with a whopping £40 pcm service charge – for a modern estate of under 10 properties, with no green spaces to maintain – utter rubbish!

    The estate agent was quite upset and kept saying it was a small amount and no big deal, I beg to differ! Last I looked the property is still on the market – now for £30k below the original asking price and considerably cheaper than similar properties in that area. Current owners have only lived there 4 years, clearly they’re desperate to escape this fleecehold trap.

    I have no doubt that house would have been unsaleable in the future, if our lender would have even let us buy it in the first place!

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