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  • FIRST POST
    • MSE Jenny
    • By MSE Jenny 1st Mar 12, 3:18 PM
    • 1,218Posts
    • 3,554Thanks
    MSE Jenny
    Extend Your Lease guide discussion
    • #1
    • 1st Mar 12, 3:18 PM
    Extend Your Lease guide discussion 1st Mar 12 at 3:18 PM



    Hi all, we've written a new Extend Your Lease guide to help you extend at a fair price.

    How did you find the info? If you've done it, how did it go and do you have any other tips you'd add? How much value do you think it added to your property?

    Thanks
    for your help!


    MSE Jenny

    Last edited by MSE Jenny; 02-03-2012 at 12:59 PM.
Page 28
    • Helen_havers
    • By Helen_havers 25th Mar 17, 10:36 PM
    • 1 Posts
    • 0 Thanks
    Helen_havers
    Marriage Value for Leasehold Extension
    Good Evening,

    I am looking to purchase a flat in a block of 15. It is a Victorian block. Lease needs extending, preferably as part of the purchase in that S42 notice is served on the freeholder. Vendor is NOT keen to engage in this idea. Notwithstanding that I have no idea how to determine the price to offer because of some clauses in the lease. I repeat them here and would welcome some thoughts on how to Price the marriage value:
    "At any time or time after the expiration of the first twenty five years of the said term the Landlord may by written notice to the tenant require that the rent hereby reserved shall be revised as hereinafter mentioned provided that no such notice shall be served within the period of 25 years after service of a previous notice under this sub clause...
    (D) and revised rent shall be a ground rent in the sense that it shall represent one-fifth of the letting value of the whole site of the building and the ground occupied and enjoyed there with for the use for which it is lawfully used at the time the revised rent is fixed and regard being had to the provisions of this lease so far as then applicable and relevant ...
    (E) an agreement between the landlord and the tenant as to the amount of any revised rent shall be in writing and signed by both parties and each party shall if so required procure if possible that a memorandum of such agreement is endorsed on or annexed to the Lease and counterpart "

    Thank you very much.
    • eddddy
    • By eddddy 25th Mar 17, 11:13 PM
    • 4,370 Posts
    • 4,037 Thanks
    eddddy
    Good Evening,

    I am looking to purchase a flat in a block of 15. It is a Victorian block. Lease needs extending, preferably as part of the purchase in that S42 notice is served on the freeholder. Vendor is NOT keen to engage in this idea. Notwithstanding that I have no idea how to determine the price to offer because of some clauses in the lease. I repeat them here and would welcome some thoughts on how to Price the marriage value:
    "At any time or time after the expiration of the first twenty five years of the said term the Landlord may by written notice to the tenant require that the rent hereby reserved shall be revised as hereinafter mentioned provided that no such notice shall be served within the period of 25 years after service of a previous notice under this sub clause...
    (D) and revised rent shall be a ground rent in the sense that it shall represent one-fifth of the letting value of the whole site of the building and the ground occupied and enjoyed there with for the use for which it is lawfully used at the time the revised rent is fixed and regard being had to the provisions of this lease so far as then applicable and relevant ...
    (E) an agreement between the landlord and the tenant as to the amount of any revised rent shall be in writing and signed by both parties and each party shall if so required procure if possible that a memorandum of such agreement is endorsed on or annexed to the Lease and counterpart "

    Thank you very much.
    Originally posted by Helen_havers
    Its probably best to instruct a Lease Extension Valuer to calculate the premium for for the s42 notice. And don't forget to budget for up to £4k in fees on top.

    It typically takes between 6 and 12 months for a Statutory Lease Extension to be completed. So I guess you're asking the seller to serve the initial s42 notice, and you will complete the lease extension process after you've bought the flat.
    • desamax
    • By desamax 27th Mar 17, 4:49 PM
    • 26 Posts
    • 29 Thanks
    desamax
    Transfer of equity then lease extension
    Hi I helped my son buy a flat in 2014 we had it in joint names. Last Sept 2016 he did a transfer of equity from me to him and his G/F So now the flat is in their joint names. Do they or he still have the right to extend their lease under section 42? As my son has been on the deeds since 2014, as only i was removed and his partner added.
    Thanks in anticipation.
    Last edited by desamax; 27-03-2017 at 5:14 PM.
    • JV1994
    • By JV1994 1st Apr 17, 11:21 PM
    • 2 Posts
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    JV1994
    78.5 years lease left on maisonette flat
    Good Evening,
    I recently bought a maisonette consisting of 2 flats of which I am the sole freeholder.
    The flat downstairs has 78.5 years left on the lease.
    Should I approach the leaseholder of the other flat with a view to extending their lease,and if so can I ask them to pay for the extended lease/legal fees etc.

    I was hoping to get a 999 year lease for both properties to make the property more attractive to future buyers.
    Any advice would be much appreciated.
    • eddddy
    • By eddddy 2nd Apr 17, 12:52 AM
    • 4,370 Posts
    • 4,037 Thanks
    eddddy
    I recently bought a maisonette consisting of 2 flats of which I am the sole freeholder.
    Originally posted by JV1994
    I assume you mean you've bought the freehold of a building which contains 2 flats.

    The flat downstairs has 78.5 years left on the lease.
    Should I approach the leaseholder of the other flat with a view to extending their lease,and if so can I ask them to pay for the extended lease/legal fees etc.
    Originally posted by JV1994
    You can approach them and suggest that. They may say "Yes" or they may say "No".

    I was hoping to get a 999 year lease for both properties to make the property more attractive to future buyers.
    Originally posted by JV1994
    Which property? Do you mean your freehold?

    The longer you extend the downstairs lease, the less your freehold will be worth.

    e.g. If you extend the downstairs lease to 99 years, your freehold will be worth more than if you extend the downstairs lease to 999 years.

    But you would expect to be paid a higher premium for extending it to 999 years than you would for extending it to 99 years.
    • JV1994
    • By JV1994 2nd Apr 17, 9:46 AM
    • 2 Posts
    • 0 Thanks
    JV1994
    Hi Eddddy
    I bought a maisonette which came with the freehold interest of my and the downstairs flat
    • eddddy
    • By eddddy 3rd Apr 17, 2:51 PM
    • 4,370 Posts
    • 4,037 Thanks
    eddddy
    Good Evening,
    I recently bought a maisonette consisting of 2 flats of which I am the sole freeholder.
    Originally posted by JV1994
    Hi Eddddy
    I bought a maisonette which came with the freehold interest of my and the downstairs flat
    Originally posted by JV1994
    You need to explain the situation more clearly.

    How many freehold titles are you referring to?
    Who owns the freehold titles?
    What do those freehold titles relate to?
    - It sounds like there is one freehold title, and it's owned by you. Can you confirm?

    How many leasehold titles are you referring to?
    Who owns the leasehold titles?
    What do those leasehold titles relate to?
    - It sounds like there is either 1 or 2 leasehold titles...
    - ... and one leasehold is owned by somebody else. Zero or one is owned by you. Can you confirm?



    Alternatively, if you're not sure about the above, perhaps explain the layout of the building. e.g. How many flats, how many floors.
    • strawberries1
    • By strawberries1 15th Apr 17, 10:02 AM
    • 551 Posts
    • 118 Thanks
    strawberries1
    The world of lease extensions and purchase of freeholds of houses and blocks of flats is littered with lawyers and surveyors who think they know what they're doing, but don't. Such folk frequently end up being sued for negligence, which is one of the reasons why professional indemnity insurance is so very expensive. Homeowners therefore need to be very careful when employing professionals to act on their behalf. Before instructing such professionals, homeowners should ask the professionals questions such as "how long have you been involved with this type of work?", "how many similar transactions have you dealt with?", "how many times have you had to take a transaction to the leasehold valuation tribunal, and what were the results?", "what is your fee?", "how long will the whole procedure take?", "why is your fee so high?", "have any previous clients complained about your service in the past?"

    I can see that these remarks may appear to be rather cynical, but I know several people who have gone through the lease extension process and ended up getting their fingers burnt thanks to poor quality professional advice.
    Originally posted by IanIan
    Which surveyors and solicitors will you recommend in a situation where the lease doubles every 25yrs starting at £250 and 20yrs left at £250before it double to £500, the final 25yrs being £4000
    • cryption
    • By cryption 18th Apr 17, 6:06 PM
    • 25 Posts
    • 36 Thanks
    cryption
    There are 3 flats in my building all the leases have about 69-70 years remaining. The 2 other flats are owned by the same person who recently has been going through extending his by 90 years. I am trying to do the same and I made an offer to the freeholder which was the same price as the flats above me are being renewed for (£4,800) after being valued by a valuer.

    I made the freeholder the same offer in an attempt to avoid unnecessary fees and hassle. Despite the fact that the flats are all nearly identical the freeholder would not accept my offer and said I have to go through the same valuer as used for the other flats.
    This is ok except for the fact that the owner of the other 2 flats told me that although he paid for the valuer for his flats they are essentially acting in the best interests of the freeholder, rather than being on your side so to speak.

    He had previously made an offer to the freeholder who said as a charity they cannot accept below market value. After the valuation they gave him their price and he happened to know for a fact that it was not the price quoted by the valuer and was actually higher. He was not supposed to know this but I presume that as he works as an estate agent himself he had contacts in the field who found out. He demanded to see the paperwork but they would not disclose to him the actual figures of the valuation and how they came to the final amount. I think in the end they did drop the price slightly but still he is demanding to see the valuers figures which have not been forthcoming.

    However I still find this really strange and concerning and am worried they will do the same to me, and as I have no contacts in the field I have no way of knowing if the price the freeholder gives is actually the price on the paperwork. Surely if I am paying for the valuer they would have to disclose their findings to me? If they are going to keep me out of the loop and freeholder is going to make up their own higher valuation what is even the point in me paying for a valuer?! Surely 'as a charity' they should not be ripping the leaseholders off. They won't take less than fair market value but are happy to demand more than the market value!

    If the figure they come back to me seems higher than the other 2 flats then obviously alarm bells ring, and I suppose I would need to get a solicitor involved but then the fees incurred by that may well work out higher than if I just took the first cost quoted. Just thinking about this all does my head in, if the freeholder were at all reasonable they would have taken my offer but no, they have to be problematic

    The valuer is supposed to be coming to view my flat to work out the renewal figure. Does anyone know if the current rental price will affect this valuation or is it just the market value? I do have a tenant in there but he is currently paying no rent for the time being as a close personal friend I owe favours to. I was going to put in a new kitchen but holding off doing any work on it as I don't want the valuation to be needlessly high.
    Last edited by cryption; 18-04-2017 at 6:10 PM.
    • eddddy
    • By eddddy 18th Apr 17, 7:03 PM
    • 4,370 Posts
    • 4,037 Thanks
    eddddy
    There are 3 flats in my building all the leases have about 69-70 years remaining. The 2 other flats are owned by the same person who recently has been going through extending his by 90 years. I am trying to do the same and I made an offer to the freeholder which was the same price as the flats above me are being renewed for (£4,800) after being valued by a valuer.

    <snip>
    Originally posted by cryption
    So the valuer that's coming is being instructed by the freeholder...

    You could instruct your own valuer instead if you want, and then follow the Statutory Lease Extension process - starting by serving a section 42 notice.

    For more info see: http://www.lease-advice.org/advice-guide/lease-extension-getting-started/

    But as you say, you'll probably end up having to pay more fees (but you might end up with a cheaper premium).

    I was going to put in a new kitchen but holding off doing any work on it as I don't want the valuation to be needlessly high.
    Originally posted by cryption
    That shouldn't make any difference.

    The flat will be valued as though the flat was in condition it was in when the lease was originally granted. Any improvements done by you or previous leaseholders should be disregarded.
    • lorraines
    • By lorraines 19th Apr 17, 10:18 AM
    • 2 Posts
    • 0 Thanks
    lorraines
    Help please, lovely Forum folks.


    I'm trying to sell my flat which has around 75 years lease left. My estate agents are trying to get me to sell subject to the lease extension being complete as part of the deal (and upon completion). My questions are?


    As it's local authority, they are advising me that I need to get a private valuation and submit and S42 to start negotiations - does that sound usual?


    Can it really take 6-12 months to complete?


    Should I just sell without the lease hassle and priced appropriately?
    • eddddy
    • By eddddy 19th Apr 17, 10:41 AM
    • 4,370 Posts
    • 4,037 Thanks
    eddddy
    There are two different routes to extending a lease
    - Informal Extension
    - Statutory Lease Extension


    Based on this...

    I'm trying to sell my flat which has around 75 years lease left. My estate agents are trying to get me to sell subject to the lease extension being complete as part of the deal (and upon completion).
    Originally posted by lorraines
    ...it sounds like the agent is talking about an informal lease extension.

    Whereas...

    As it's local authority, they are advising me that I need to get a private valuation and submit and S42 to start negotiations - does that sound usual?

    Can it really take 6-12 months to complete?
    Originally posted by lorraines
    .... your freeholder (the local authority) is proposing a Statutory Lease extension.

    It would be very difficult to offer a buyer 'extension on completion' with a statutory lease extension - because it's hard to estimate how long the process takes (I'd say 6 to 18 months).


    Should I just sell without the lease hassle and priced appropriately?
    Originally posted by lorraines
    Do you have the funds to pay for a lease extension before you sell? That might be the best option.

    Here is some background info: http://www.lease-advice.org/article/lease-extension-of-leasehold-flats-the-two-routes/
    • tomatoandcheese
    • By tomatoandcheese 19th Apr 17, 11:57 AM
    • 9 Posts
    • 7 Thanks
    tomatoandcheese
    Hi all, hoping for some advice. My husband and I are trying to buy a flat in London. There is very little in our preferred area in our price range and we've already been gazumped once. Now my husband has seen a flat that would be way out of our price range, except it has a short lease. It's pretty much our perfect property and is listed at offers over £290k. We have a max budget of £300k.

    The estate agents say it has 72 years left on the lease (which is what the asking price is based on) but we've consulted the land registry and in fact there is only 65. Our lender will just about give us a mortgage on it at this length but wouldn't accept any shorter. Having looked at both online calculators and recent tribunal decisions for our area, a lease extension would cost in the region of 25-35k not including fees. We have £15k of that and the potential to borrow the extra from a relative (to be paid back plus inflation at 2% but no other interest). The likely value of the property after extension is somewhere between £320k and £360k

    I think we'd be daft to go for this and should look outside our preferred area for something less 'perfect' but less likely to land us in debt (even if it is to a family member). My husband is really sold on the property though and wants to at least put a low offer in to see if we could then finance some of the extension via the mortgage. He's thinking £275-£280k. What do you think? Worth a punt with a low offer or avoid the headache and look elsewhere?
    • lorraines
    • By lorraines 19th Apr 17, 1:12 PM
    • 2 Posts
    • 0 Thanks
    lorraines
    [QUOTE=eddddy;72423203]There are two different routes to extending a lease
    - Informal Extension
    - Statutory Lease Extension


    Based on this...



    ...it sounds like the agent is talking about an informal lease extension.

    Whereas...



    .... your freeholder (the local authority) is proposing a Statutory Lease extension.

    It would be very difficult to offer a buyer 'extension on completion' with a statutory lease extension - because it's hard to estimate how long the process takes (I'd say 6 to 18 months).




    Do you have the funds to pay for a lease extension before you sell? That might be the best option.



    I don't have the funds or the time to go through the whole extension process. My estate agent was talking about 'getting the ball rolling' which I didn't really understand.
    • always_sunny
    • By always_sunny 19th Apr 17, 1:20 PM
    • 2,688 Posts
    • 2,847 Thanks
    always_sunny
    Hi all, hoping for some advice. My husband and I are trying to buy a flat in London. There is very little in our preferred area in our price range and we've already been gazumped once. Now my husband has seen a flat that would be way out of our price range, except it has a short lease. It's pretty much our perfect property and is listed at offers over £290k. We have a max budget of £300k.

    The estate agents say it has 72 years left on the lease (which is what the asking price is based on) but we've consulted the land registry and in fact there is only 65. Our lender will just about give us a mortgage on it at this length but wouldn't accept any shorter. Having looked at both online calculators and recent tribunal decisions for our area, a lease extension would cost in the region of 25-35k not including fees. We have £15k of that and the potential to borrow the extra from a relative (to be paid back plus inflation at 2% but no other interest). The likely value of the property after extension is somewhere between £320k and £360k

    I think we'd be daft to go for this and should look outside our preferred area for something less 'perfect' but less likely to land us in debt (even if it is to a family member). My husband is really sold on the property though and wants to at least put a low offer in to see if we could then finance some of the extension via the mortgage. He's thinking £275-£280k. What do you think? Worth a punt with a low offer or avoid the headache and look elsewhere?
    Originally posted by tomatoandcheese
    It really depends on your finances, though keep in mind that if you were to buy the flat you would need to own it for 2 years before starting the statutory lease extension.
    Will the current owner start the extension before you complete?
    Informal Lease extension could start anytime but usually are best avoided.
    Expat here with an EU passport.
    • tomatoandcheese
    • By tomatoandcheese 19th Apr 17, 1:31 PM
    • 9 Posts
    • 7 Thanks
    tomatoandcheese
    really depends on your finances, though keep in mind that if you were to buy the flat you would need to own it for 2 years before starting the statutory lease extension.
    Will the current owner start the extension before you complete?
    Informal Lease extension could start anytime but usually are best avoided.
    The owner has already agreed to start the process so we wouldn't have to wait the two years, since costs would only go up.

    Financially we will be better off once paying a mortgage etc since rent here is so high. It should give us roughly £300 extra a month which could go towards paying back a loan. But we also have our second child starting nursery in about 6 months and she'll overlap with the older one for 8 months when he starts school so there will be a short period of paying childcare for two which is pretty pricey!
    • always_sunny
    • By always_sunny 19th Apr 17, 1:52 PM
    • 2,688 Posts
    • 2,847 Thanks
    always_sunny
    Help please, lovely Forum folks.

    I'm trying to sell my flat which has around 75 years lease left. My estate agents are trying to get me to sell subject to the lease extension being complete as part of the deal (and upon completion). My questions are?

    As it's local authority, they are advising me that I need to get a private valuation and submit and S42 to start negotiations - does that sound usual?

    Can it really take 6-12 months to complete?

    Should I just sell without the lease hassle and priced appropriately?
    Originally posted by lorraines
    Section 42 is what the leaseholder (you) need to issue the Freeholder to start the statutory lease extension. The whole process may take 6-12+ months but you can sell in the meantime and transfer the benefits to the buyer.

    You will have upfront costs for valuations, etc and obviously the premium which you will need in cash. Informal extensions might be cheaper but usually tend to be more costly overall (i.e. cheaper premium and quicker, though high Ground Rent).

    If you can't wait and/or don't have the funds to do the extension, you can sell with the current lease; most lenders require at least 40 years left on the lease after the mortgage is extinguished. 75 is not that short but you will need to price accordingly.
    Long leases are obviously better but long leases with bad terms (usually informal) can be very bad too.
    Expat here with an EU passport.
    • Linj59
    • By Linj59 22nd Apr 17, 1:02 PM
    • 1 Posts
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    Linj59
    Should we extend our lease formally to reduce ground rent?
    Would value any advice you can give on our situation:
    We extended our lease to 99 years 2 years ago on a flat valued then at £160k at a cost of £22,000 plus costs of valuations and solicitors for both ourselves and the leaseholder (lease had only just under 54 years left). We did it informally via the person providing the valuation who did all the negotiations etc. Part of the final agreement was an increase in ground rent from £30 pa to £200pa and doubling every 25 years. Now we are in a slightly better financial situation due to a legacy, we are wondering it it makes financial sense to go for a formal lease extension which would also mean nil ground rent. Online lease calculator suggests this would cost around £10k including costs. Part of me wants to deprive leaseholder of ground rent but not sure if we are at risk of cutting off our noses to spite our faces. Thank you for any help you can offer.
    • always_sunny
    • By always_sunny 22nd Apr 17, 5:53 PM
    • 2,688 Posts
    • 2,847 Thanks
    always_sunny
    Would value any advice you can give on our situation:
    We extended our lease to 99 years 2 years ago on a flat valued then at £160k at a cost of £22,000 plus costs of valuations and solicitors for both ourselves and the leaseholder (lease had only just under 54 years left). We did it informally via the person providing the valuation who did all the negotiations etc. Part of the final agreement was an increase in ground rent from £30 pa to £200pa and doubling every 25 years. Now we are in a slightly better financial situation due to a legacy, we are wondering it it makes financial sense to go for a formal lease extension which would also mean nil ground rent. Online lease calculator suggests this would cost around £10k including costs. Part of me wants to deprive leaseholder of ground rent but not sure if we are at risk of cutting off our noses to spite our faces. Thank you for any help you can offer.
    Originally posted by Linj59
    If you can afford to I would, £10k to get GR to nil seems cheaper than paying overall £75k GR assuming there's no capping.

    Hope you got the 99 years on top of the remaining 54!
    Expat here with an EU passport.
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