Extending our lease - evil council!

never_too_late_2

Dear All,

Hoping someone can help .

We own our 2-bed maisonette flat and are in the process of selling it. However, the remaining lease on the property is just under 60 years so as one of the conditions of sale, we have said that we'll extend it.

As such, we contacted the leaseholders, namely our local council. They came out to do a survey (charging us for the pleasure of course) which I understand was largely a valuation of the property. Then we received a quote to extend the lease with no explanation of how they came to whatever figure they're using and it's just under 13,000 GBP! On top of that we have to pay their legal costs, as well as our own AND the survey costs so all in all we're looking at something around 15 grand.

This is absolutely crazy of course so I was wondering if anyone had been in a similiar situation or had some advice about our rights. Can we challenge their quote? I believe it's non-negotiable which seems like madness.

All assistance gladly received. HELP PLEASE!

Thanks in adavnce,
NTL
-x-

poppysarah

How long have you owned it? Were you not told when you bought that leases are expensive to renew?
There's a whole forum about leasehold stuff - but can't see it in google at the moment

This one I think
http://www.lease-advice.org/

2muchdebt

You might find some useful info on http://www.lease-advice.org/
Towards the bottom of the homepage there is a "online calculator for lease extensions" - Haven't delved into this, but might help?
Otherwise, they offer free advice over the phone - could be worth a call.
Good luck!

barnaby-bear

never_too_late wrote: »

Dear All,

Hoping someone can help .

We own our 2-bed maisonette flat and are in the process of selling it. However, the remaining lease on the property is just under 60 years so as one of the conditions of sale, we have said that we'll extend it.

As such, we contacted the leaseholders, namely our local council. They came out to do a survey (charging us for the pleasure of course) which I understand was largely a valuation of the property. Then we received a quote to extend the lease with no explanation of how they came to whatever figure they're using and it's just under 13,000 GBP! On top of that we have to pay their legal costs, as well as our own AND the survey costs so all in all we're looking at something around 15 grand.

This is absolutely crazy of course so I was wondering if anyone had been in a similiar situation or had some advice about our rights. Can we challenge their quote? I believe it's non-negotiable which seems like madness.

All assistance gladly received. HELP PLEASE!

Thanks in adavnce,
NTL
-x-

A lease that short will be expensive to extend because it's a proportion of the increase in value the extension will bring. A lease that short makes the flat near unmortgagable and thus makes it have a very low open market value. There's one in my area that's under 40 years and the flat is on the market for abut 40% of it's value if it had a longer lease (would be 250k+ with a decent lease) they are quoting 60k to extend...
http://www.rightmove.co.uk/property-for-sale/property-24661937.html
The original price of the property should have reflected the short lease value.

Richard_Webster

How long have you owned it? Were you not told when you bought that leases are expensive to renew?

This is an important point. Unless you bought it say 20 years ago you should have had the point explained to you.

As a rough ballpark, the spreadsheet that I use to give rough calculations suggests a £150,000 flat with a £50 pa ground rent and 60 years left would cost about £12,000 to extend by 90 years with a reduction of ground rent to nil.

Running_Horse

Why are the council evil for protecting public assets? I'm guessing the value of the property will increase by more than that amount, and fruther guessing the property once left public ownership at a discount. Correct me if I'm wrong.

Debt_Free_Chick

This begs the question as to whether your property has been valued with the current lease, or the extended one.

If valued with the current lease, then it's buyer who gets the benefit of the extended lease I would be expecting them to up their offer.

If not, then you need the EA to value the property with the extended lease. you can then consider taking the property off the market, extending the lease and remarketing it at a higher price

Robert_Sterling_3

As things are in 60 years time your flat will be worth nothing to you if you keep the lease as it is.
You clearly need two valuations of your flat.
a) As it is now with a 60 year lease.
b) As it would be with the extended lease.
This is what I would expect the coucil to do.
The £15,000 charge might be because the valuation of the flat might increase by £30,000 with the extended lease.
They are sharing the uplift with you.
I hope this is the case because if it is then the more they charge the better for you. as well as the council.

Whether or not you, or somebody else, got a discount is a complete red herring.

Richard_Webster

Unless you have the lease extended. you won't be able to sell your flat except to cash buyer at a heavily discounted price.

How long ago did you buy the flat and what were you told by your solicitor about the need to extend the lease in the future?

roses

Think of it another way. By extending the lease, will you get at least £15,000 more than if you didn't?

Soot2006

one of the conditions of sale, we have said that we'll extend it.

Sounds like property is being sold with longer lease than it is currently holding.