Case Study
225 South Ferry Quay
Location: Liverpool, L3 4EE
Case Study for 225 South Ferry Quay, Liverpool, L3 4EE
We acquired the freehold estate of this dockside three storey townhouse property for the leaseholder using the Leasehold Reform Act 1967 and completed in 2019, at a price of £1666.00 plus agreed Landlords permissible fees of £1100.00 (inclusive of VAT), totaling £2766.00 to pay. Our fee was £395.00 for the entire process and was invoiced upon completion at HM Land Registry.
Initially we were unable to agree the terms of transfer as to a freehold service charge which can be refused by the buyer, and the extent of the user clause.
We were informed that the estate roads were not of a standard suitable for adoption by the Local Authority, and any service charges are administered by the tenants management company, and on that basis our client agreed to a service charge for the upkeep of the roads and paths, and we agreed to a user clause to limit the use of the property to that of residential use for a single household or for family occupation. We also agreed some other usual restrictions on use, such as a limitation on the number of pets and an agreement not to alter the appearance of the front of the property.
Following the agreement our previous application to the First-Tier Property Tribunal for a determination on the terms of transfer for this property was vacated.
Comment
The price payable represents a 6% capitalization rate which is 16.66 times the ground rent, with a valuation date of January 2017 (this is the date of service of the tenants notice to have the freehold), albeit we now think multiples for similar non-reviewable ground rents have fallen to 14.28 to 15.38 times or 6.5%-7% capitalization rate. We consider the Landlords legal fees of £750 + Vat to be approaching the top of what is acceptable, however the Landlords valuer fee of £200 (no VAT was chargeable) was about half the expected figure, and therefore the global sum concluded was, considered to be an acceptable outcome.
A title plan to show the extent of the land acquired is downloadable below.
The link to our public Leasehold Reform page for houses is at this Link
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Additional Downloads
Case Study - 225 South Ferry Quay, L3 4EE - Feb 2019CONTACT ORME ASSOCIATES
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