Bank requires the flat im purchasing to have a longer lease..

fatpig_2

chewmylegoff wrote: »

i) the flat is not share of freehold (this would probably make it cheaper to extend the lease, but not necessarily).

.

I thought that share of freehold = 'infinite' lease??

Richard_Webster

1. If the lender won't lend the seller has got to have the lease extended for you to buy - it is not a case of the seller merely finding out the cost - it has actually got to be done.

2. Even if it didn't have to be done any figures given to the seller would not necessarily be available for you because you have to have owned the flat for 2 years before you have legal right to an extension. Freeholders/lessors/landlords know this and put the price up accordingly.

3. One reason for the seller's reluctance to deal with the point may be that he has had previous experience of dealing with the freeholder which has not been good and he fears a high price may be demanded. If the seller ends up paying a higher price for the extension than he should because he is desperate to sell, and the freeholder knows that, then once OP has bought the property he may find the freeholder tries on scams etc and makes his life a misery.

Frankly there are some freeholders who have been mentioned on this forum in other threads that are best avoided, i.e. if they are the freeholder of the property you propose to buy, DON'T buy, period. Your solicitors, if they have had any experience of dealing with flats, will know the identities of the worst ones...

muggz

a new development : the freeholder owns the flat below and now wants to buy the flat im purchasing.

This means they can do as much as possible to delay the extension and generally make my life hell when im living there?

Captain_Mainwaring_2

Well on paper it would seem that he already does own the flat you are purchasing.

While he won't necessarily make you life hell, you will be paying ground rent to him (can be a nice little earner).

Richard_Webster

a new development : the freeholder owns the flat below and now wants to buy the flat im purchasing.

This means they can do as much as possible to delay the extension and generally make my life hell when im living there?

Quite possibly, yes. Freeholder's line will be to your seller that if he wants the lease extended it will cost £Z but if he sells to the freeholder then the freeholder will buy for original proposed price less a figure not as much as £Z so seller is better off selling to freeholder.

You may have to walk away - it is buyer's market so let the seller do the pleading with you.

chewmylegoff

fatpig wrote: »

I thought that share of freehold = 'infinite' lease??

no - if it's SOF the freeholders still have to agree to any extension. i am not sure whether this is by unanimity, 75% majority or simple majority, but it does technically have to be approved.

at a minimum there will be legal costs involved as the new leases will have to be granted.

usually it will not be in the interests of the other people with SOF to block a leasehold extension or charge a premium for it, however they can if they want to (e.g. building split into three flats. 2 have 150 year leases and 1 with a 70 year lease - the 2 freeholders with 150 leases may decide that they can screw the other out of some money as they won't need to be extending their leases within their life time - I'm pretty sure that technically if they want to they can demand a premium and force the other person to go through arbitration (the person wanting to extend would have to pay all of the legal costs for both sides)).

obviously it wouldn't exactly create a loving environment with their neighbour, but i'm pretty sure that legally they could go down this route.

chewmylegoff

fatpig wrote: »

Isn't the length of the lease supposed to be clearly stated in the HIP document which they are duty bound to provide a copy of?

i don't know - who would read it even if it did?

i didn't word it well, but i was more meaning the EA or solicitor flagging up the issue that the lease length may be a problem with getting a mortgage.

presumably the HIP wouldn't flag this issue in particular as it would be "useful information" for a prospective buyer!!

muggz

do you guys know roughly how much a lease survey costs?

howler_2

muggz wrote: »

Im in the process of buying a flat

:eek: i thought i'd mis-read

Doozergirl

For valuation purposes for a lease extension?

I've paid £70 for a desktop and £199+VAT for something more comprehensive.

I don't really understand though. 70 years is a point at which a few of the high street lenders (don't know whether the credit crunch has changed this) won't fall below when the mortgage is taken out. Some lenders will go to 25 years plus the term of the mortgage even. Even with a lender not accepting below 70 years, doesn't explain why they want 99 years. I'd try a different lender if you're that desperate, using a broker that is familiar with the usual required length of lease.

But you must bear in mind that you must take the cost of a lease extension into extent because the flat needs one soon. The freeholder wanting the flat is a big issue. Even if they don't buy it because you've beaten them on price, they can make the lease extension prohibitively expensive for you and the shorter the lease becomes, the more affected the price becomes - of both flat and lease extension. The cost of challenging the price legally is often prohibitive. It's a huge concern.