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Thomas
Thomas, Lawyer
Category: UK Law
Satisfied Customers: 7609
Experience:  BA (Hons), PgDip, Practising Solicitor
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I have been unemployed for a year and i am forced into the

Customer Question

I have been unemployed for a year and i am forced into the position of selling my flat to pay off my debts. I can't get help to pay the mortgage because i remortgaged to pay debts off. I haven't paid the mortgage for the past two months.
My lease has 75 years left and therefore i am having difficulity selling the property.
I can't afford the costs and legal advice regarding extending the lease.
Is my only option to wait for the mortgage company to reposes and go into brankruptancy?

Regards
Paul
Submitted: 6 years ago.
Category: UK Law
Expert:  Thomas replied 6 years ago.

Hi,

Thanks for your question.

Most of the high street lenders require between 50-70 years remaining on
the Lease in order to offer a mortgage to someone so you may (may) find that a
buyer makes an offer, but obvioiusly it's not ideal.

If you cannot pay the landlord's fees to extend the lease and the fees
he has quoted are reasonable then the alternative is to market the property to
prospective buyers with the option to extend. You may choose to offer that you
will pay the fees to extend the lease from the proceeds of sale. So in effect
the purchase price will be reduced by the landlord's fees to extend because on
completion the extended lease documents will be executed and the landlords fees
paid from the purchase price sent to you by the buyer's solicitors.

You would obviously need to make sure the landlord is willing to do
things this way because normally they would ask for their fees up front.

Other than that you remain obligated to pay the mortgage repayments
under the mortgage, if you cannot meet these then repossession proceedings is a
possibility.


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I will answer your follow up questions you may have.

 



Kind regards,





Tom

 

Customer: replied 6 years ago.

Tom,

 

Thank you for your answer, most of the information i knew already.

As you have probably have already garthered from my original question my relationship with my landord is starined and they would make things akward.

Their tatics are probably to make it very hard for me to sell to a third party and are looking to buy the property on the cheap themselves.

This is where things become difficult if i was to drop the price to reflect the costs and the timescales involved the situation would probaly arise where i couldn't pay off my debts from the sell.( i realise this would also put of a prospective buyer because they would have wait two years to extend the lease)

Alternatively if somehow i could reach agreement with my landord to pay the cost involved in paying for the legal work and lease extension out the sell proceeds this would also put me in the situation where i couldn't pay off my the debts from the proceeds.

I think i was probably fishing to find a way out my situation without inccuring additional expenses and as you have probably guessed i am at my tethers end and starring down the abyss.

 

Paul

p.s whoever came up with the leasehold system needs shooting

Expert:  Thomas replied 6 years ago.
Hi Paul,

What debts are you referring to - your mortgage on the property or other personal debts?

Kind regards,

Tom

ps. It's a fairly common complaint.
Customer: replied 6 years ago.

Tom,

 

Thank you for corresponding with me, i appreciate some one to talk too.

 

Debts are Mortgage £37000 Credit cards £5500 Loan £1000

 

Offer made on poperty £65,000 So therefore i have probably estimated that either i would have to drop price to £55,000 hoping that the prospective buyers would be pepared to hold onto for two years before selling property.iI don't think this is in their plans.

The likelyhood off the freeholder puting off their costs and accepting monies from a proceeds from the sell is about 1%

With Estate Agents costs and legal fees being higher than normal becuase property is leasehold(persuming a sell does go through). As you can see i am stuck in a very nasty situation.

 

Paul

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Expert:  Thomas replied 6 years ago.
Paul,

No problem, it's fine.

I would make sure you correspondence with the landlord as to the cost of a lease extension is not in documentary form only.

If you think the costs of the landlord for extending the lease are unreasonable then you should state this to them and also that you are minded to apply to the Leasehold Valuation Tribunal for a determination on the costs of this. You can do this under the Leasehold Reform, Housing and Urban Development Act 1993. You can do this yourself:-
http://www.lease-advice.org/information/faqs/faq.asp?item=98

You can calculate the approximate cost of lease extension here:-
http://www.lease-advice.org.uk/calculator/

If you simply cannot pay the costs of extending the lease then you have to persist with finding a buyer.You need to impress upon the agent when they are marketing the property that the new owners will have the right to extend the lease if they wish to pay the costs of this.

If you cannot extend and cannot find a buyer then you are left with either taking a hit on the price by selling back to the landlord or waiting until the mortgage company take repossession proceedings. Their fees for repossession would be added to the amount they owe and generally they are after a quick sale rather than best price.

Your other debt is simply your private debt and if this still remains and you cannot pay and your creditors are looking at enforcement then you should look at entering an IVA.

I'm very sorry it could not be better news, but my advice is to persist with your negoations with the landlord and attempting to find a buyer.



If this has been useful please kindly click accept so that I may be rewarded for my time. If you do not click accept your money stays with the site and I do not receive any credit for the time I have taken to answer your question.

I will answer your follow up questions you may have.

Kind regards,


Tom
Thomas and 2 other UK Law Specialists are ready to help you
Customer: replied 6 years ago.

Tom

 

Thank you. You have been most kind.

I would use you agian.

Hopefully if i do it will be better circumstances.

 

Paul

Expert:  Thomas replied 6 years ago.
Paul,

Try to remain calm.

If the worst comes to the worst and you are made bankrupt then it is not the end of the world. Many bankrupts finds that it illeviates the stress.

You never know - you might find a job relatively soon and get back on your feet. Things can change quickly, though it may not seem like it at the time.

I wish you the best of luck.

Kind regards,

To,