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Inheriting a property and extending a lease

Hi,

My dear Mum passed away aged 52 on 11 May due to a brain tumour. :(. A truly wonderful and humble woman who did everything for her children and she will be missed so much by all her family and friends.

Me, my sister and brother have inherited her flat, which has approximately 80 years left on the lease, which can be extended by 90 years after it is owned for two years.

Mum died exactly one year (11/5/2017) after buying the property (11/5/2016). Does this mean we have to wait one year or another two years to extend the lease for a further 90 years. I am not 100% sure.

Thanks
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2010- £680
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Comments

  • Slithery
    Slithery Posts: 6,046
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    2 years. The clock resets every time there is a new owner.
  • G_M
    G_M Posts: 51,977
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    edited 21 May 2017 at 11:30PM
    At present the property is 'owned' by the Estate of your mother.

    I don't believe this counts as a change of owner for these purposes - but I admit I'm not sure.

    Did your mother leave a will, and who is/are the Executers? If not, who is applying to act as Administrator of the Estate?

    The Executer/Administrator must manage the Estate in the best interests of the Beneficiaries, up until the point that Probate is granted, after which the property can be transferred to the Beneficiaries.

    If this were to take a year+, then the Executers could (I believe) aply to extend the lease (since two years would have passed).

    However, a 12 month Administration period would be exceptional, and would only really be likely if the Estate were extremely complex.

    I would suggest that along with ensuring you understand the Probate process, and perhaps involving a Probate solicitor if you feel you need help, (and asuming you are the Administrator), you also take advice on the lease issue.

    Other Qs I would ask :

    * what do the Beneficiaries intend to do with the property?
    * why the desire to extend the lease?
  • G_M
    G_M Posts: 51,977
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    Sorry. Some of my comments & Qs above are still relevant, however leaseadvice has this to say:
    I’ve inherited a flat with a short lease. Can I extend it?



    If the deceased was a qualifying tenant under Leasehold Reform Housing and Urban Development Act 1993 you would have the right to extend the lease within two years of the grant of probate or letters of administration.
    The deceased would be a qualifying tenant, if their lease was more than 21 years when originally granted and they had been the registered owner of the flat for 2 years before their death.
    Alternatively it may be possible to extend the lease informally by agreement with the landlord. If you are informally negotiating there are no rules and so you cannot insist on the landlord agreeing to grant an extension. All you can do is to negotiate.
  • Hoploz
    Hoploz Posts: 3,888 Forumite
    What are you going to do with the property? If you're going to sell then selling at a discount equivalent to the cost to extend would make most sense. Indeed, if there are 80 years left then this may not be much of a discount as it is still mortgageable and not an emergency situation.

    If you're going to keep it then there's no need to renew it straightaway.

    The benefit to renewing the lease before the 80 year mark is that it will cost less due to marriage value. Have you been through any of the online lease extension calculators? These should tell you what sort of cost you can expect so if you put in the different variables you'll see whether it's worthwhile doing or not. In a situation like yours I'd think it's an unnecessary complication to try and do it straightaway.

    The other option is to approach the freeholder 'informally' as any owner can do this at any time but be aware that informal lease extensions can be less good terms than statutory ones, so you could end up paying more in the long term via increased ground rents or poor terms which reduce the market value if you're not careful.
  • AdrianC
    AdrianC Posts: 42,189
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    G_M wrote: »
    Sorry. Some of my comments & Qs above are still relevant, however leaseadvice has this to say:
    The deceased would be a qualifying tenant, if ... they had been the registered owner of the flat for 2 years before their death.

    They weren't.

    OP - two years it is. When you say "approximately" 80 years left, do you know exactly how long?
    Have a play with the calculator to see what the cost is likely to be...
    http://www.lease-advice.org/calculator/
  • G_M
    G_M Posts: 51,977
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    AdrianC wrote: »
    They weren't.
    I think OP knows that!
  • dazcouz
    dazcouz Posts: 2,530 Forumite
    So my mum passed away exactly one year after owning the property and the property will now be passed onto her three children (which includes me). The executors of the will are my auntie and uncle and the process is likely to take months? Just asking for advice as never received anything in a will before and was wondering if it will take another year or two to extend the least which is at 80 years. Or does a property have to be sold and the value split equally between the three beneficiaries? Thanks.
    Competion Wins 2008 - £1700 - 2009 £5300
    2010- £680
  • AdrianC
    AdrianC Posts: 42,189
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    What does the will say about what happens to your mother's assets? Does it mention the flat specifically?

    The executors job is to follow the directions of the will, and ensure the assets are distributed fairly. If the will just says "third each", the flat is the majority of her assets, and you particularly want it, then you're going to need to come to an agreement that will almost certainly involve you paying cash in to your siblings.

    If the flat is still part of the estate 24 months from completion of the purchase, then the executors could start to extend the lease - IF it makes sense from a return on investment for the estate point of view. If you're paying money in, then this MAY increase the amount you need to pay in.

    Otherwise, the two year clock starts again on the day the flat is transferred to your ownership.
  • dazcouz
    dazcouz Posts: 2,530 Forumite
    It states in her will that her assets (property) and cash should be divided equally between her three children.
    Competion Wins 2008 - £1700 - 2009 £5300
    2010- £680
  • AdrianC
    AdrianC Posts: 42,189
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    dazcouz wrote: »
    It states in her will that her assets (property) and cash should be divided equally between her three children.
    There y'go, then. So long as everybody comes out roughly level, it's up to you to figure it out among yourselves as to what goes where.
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