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Sorry, but the only non-negligent way of advising the typical buyers who are trying to buy the property as a private residence on the basis of one of these toxic leases is to tell them "I can act for you in your purchase if you really insist, but my strong advice to you is not to touch it with a barge-pole and to find some other property to buy, unless the escalating rent clause can be removed (even if you have already paid for a survey). Otherwise you will end up with a rent that is sky high in a property that is totally unsaleable saddled with having to pay off a sizable mortgage over the next 25 years. And actually, this talk about mortgages is all theoretical because you need, in fact, to be a cash buyer if you really insist upon throwing your money away on the property. This is because, if I am also expected to act for your intended mortgagee, then it will be my duty to tell them about the escalating rent clause and the effect that it will have on their security, which will result in their instantly withdraw their mortgage offer."

It really is not good enough for the solicitor to plead that they thought that everything would be alright because the nice seller/landlord will undoubtedly sell them the freehold at a knock-down price within the first ten years, without selling the freehold on to some finance company out to milk the property for all the rent they can legally extract from it under the terms of the lease, or only sell it for the full freehold value that the escalating rent clause actually justifies.

It might be different if the prospect of later paying a modest value for the freehold is underpinned by a legally watertight option agreement. However, the competent legal adviser will then need to give the buyer clear warning that (quite apart from the need to ensure that any option agreement is the subject of a notice in the landlord's title) if the clients are to rely upon such a contract, they need to be sure that they will actually exercise the option within the option period, in accordance with the terms of the option agreement, and have the money available to do this. Otherwise the thing will be like an unexploded bomb that will go off in their faces unless defused before the count-down timer reaches zero.

This may seem a little over-dramatic, but it really isn't, because the average buyer of a domestic property will have no clue about how to read and interpret the terms of the typical modern lease. Nor should the solicitor expect them to (even if reasonably well-educated, they are unlikely to have the stamina and powers of concentration to wade through and understand, say, a 60 page document that is invariably couched in legalese). When I was in private practice it was my standard practice to accompany a copy of the lease with a report in ordinary English that highlighted the principal features of the lease that would be important to the lay client. Quite apart from anything else, doing this meant that I myself understood the terms of the lease, so as to be able to spot any pitfalls (such as an excessively escalating rent clause).

I still believe that this is the only proper way to advise a client buying a leasehold property, though I expect there will be those who say that practitioners cannot afford the time to do this whilst having to stick to charge the client a competitive fee. But if you can't do the job properly why do it at all (quite apart from running the risk of negligence claims if something goes wrong)?

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