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Michele Hillgarth, 7/4/11 12:51 +0100, Purchase of Head Lease & Freehold of Mitre Ho 1
From: "Michele Hillgarth" <michele@hillgarthart.com>
To: "Segar & Lindy And Sacha Karupiah" <segar_9@hotmail.com>,
"Samya Riad" <riadsf@gmail.com>,
"Paul Brown Constable" <studio@graffiti.biz>, "Christopher Leigh Pemberton" <clp@sw12group.com>
Subject: Purchase of Head Lease & Freehold of Mitre House
Date: Thu, 7 Apr 2011 12:51:25 +0100
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Dear All,
Following my meeting with Cornay Manton Surveyors, and further to a telephone conversation with Dorrington, I wanted to give you some feedback on the present situation.
1) Re: Freehold
Following some investigation, I can now confirm that the freehold is divided into 2 sections - the commercial side and the residential side. In order to qualify for buying the freehold, the commercial side must not exceed more than 25% of the building, and I can confirm that the commercial side is currently well over this so we do not qualify. We cannot therefore force the freeholder to sell us the freehold, and they will be unlikely to sell it to us.
2) Re: the Head Lease
We obviously qualify to buy the head lease, and this should not only interest the people who have not extended their lease but the 3 flats which have a lease extension. This is because they are also contributing to the service charge in the building, and I would think would have an interest in making sure the building is run properly.
If we buy the head lease, we control the running of the building and the expenses, and bearing in mind that the freeholder has no further interest in the building it seems it would be an advantage for us. At this stage, we do not lose anything by going ahead with this - we still appoint a managing agent of our choice who we believe will be running the building properly.
Regarding the reserve fund of the building, although it belongs to the leaseholder we are not currently able to access it - but it would be transferred to the next managing agent (or the existing one if we decide to keep them on). If we were to change managing agent, the head leasee would transfer the money to their lawyer so the money is always secured.
The important thing is to register our interest and send our notice in. Unfortuantely we cannot buy the head lease before the auction, but by registering our interest it means that automatically at the auction the auctioneer will have to tell other potential buyers that the leaseholders are interested
in purchasing the head lease. This will make it far less appealing to other potential bidders, giving us a likely possibility of getting it at a low price. By registering our interest we are not committing in any way, and from the auction we have 28 days to make up our minds regarding matching the price of any potential bidder, and we have a further 28 days after this to decide whether to keep the managing agent or appoint a new one. It seems to me that we should really go ahead with this
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