The inheritance of a retirement leasehold flat has proved a mixed blessing for one Carlex reader: who now faces demands for £10,000 in unpaid service charges to Peverel with the dreaded F-word – forfeiture – also being mentioned.
In March last year retired academic Michael Welch, 64, inherited his father’s one-bedroom flat at Risingholme Court, Heathfield, in East Sussex.
It had belonged to his father Frederick, who bought it priced at £164,000 at the height of the boom on a shared equity scheme with McCarthy and Stone, which owns 30 per cent.
It was apparently a bargain price, with the original price supposedly £245,000 (which could, of course, have been a fantasy figure dreamed up by a salesman).
The flat at the 47-flat site has been on the market for more than a year and its price has been reduced from £185,00 to £155,000.
It is now with McCarthy and Stone’s re-sale service at £165,000, having been back on the market at an optimistic £187,000.
There are five one-bedroom flats for sale according to www.housingcare.org, ranging in price from £149,500 to £179,000.
Although the flat has been empty all this time, the service charge bills have been stacking up and now exceed £10,000.
Furthermore, an external refurbishment is on the cards requiring a further £23,000 from residents.
“I am on a fixed income and I just cannot afford to pay these charges,” says Mr Welch.
He has contacted Peverel, which has suggested a £1,000 a month repayment proposal. But that is more than Mr Welch can pay.
If he does not pay, Peverel has indicated that it will ask freeholder Fairhold to commence forfeiture proceedings.
It is likely that McCarthy and Stone would step in to prevent this asset being forfeited – to protect its 30 per cent – but the conditions attached to such an arrangement might prove onerous.
Carlex has advised Mr Welch to borrow the money from any respectable lender and a rate of interest of his choosing and make every effort to sell the flat.
“This was not my problem and I have never lived there,” says the frustrated academic. “I do not want to have anything to do with this.”
Ehem … to which a simple solution would be to give the flat to the freeholder, Fairchild (prop: Mr Tchenguiz), who will doubtless be grateful.
Mr Welch’s vexation is understandable. Retirement leasehold is a poisoned chalice legacy and no other residential property class has fallen in value to the same degree.
It is why Carlex says do not buy this product.
Or, if you really have to, make sure you buy a re-sale property, not a new one, in a block that is self-managing, ideally owns the freehold, and it harmonious.
Otherwise, you might find yourself buying a headache … and passing one on.
If Carlex readers have advice, please comment on this article