Lease query

Ben_Baileys

We are in a similar position.

Found a great flat with 78 years on the leasehold. We're FTBs and didn't know the implications of this until speaking to our solicitor who advised us strongly to get them to extend it. We've asked them to extend it and we'll foot the bill as it will certainly add to the property's price and we don't want to risk losing it. We just hope that it doesn't take much longer to sort out now!

I'd perhaps advise you to consider doing something similar. I think you should at least try asking the vendor to extend the leasehold before it drops below 80 years. It should save you money in the long run, and if they say no, then you could try to negotiate a deal, and perhaps undertake to pay for it yourself as we have done. And if they still say no, then you're in no worse a position than you're in now.

All the best,

Ben

Ben_Baileys

And in response to your question, the plan for us is that the vendor will sort out the extension with the freeholder and put it in our name. According to our solicitor this seems to be the logical way of progressing and she hasn't indicated that there is anything untoward about doing it that way.

Worried

Ben_Baileys wrote:

And in response to your question, the plan for us is that the vendor will sort out the extension with the freeholder and put it in our name. According to our solicitor this seems to be the logical way of progressing and she hasn't indicated that there is anything untoward about doing it that way.

How much is this costing you? Has your solicitor or vendor's given you any indication of how long it would take to arrange the extension?

10_to_3

Worried,

If you haven't already done so, investigate The Leasehold Advisory Service, http://www.lease-advice.org . It can be a bit difficult wading through their stuff sometimes but we found it to be very helpful. They provide the formulas used to work out the ammount you will have to pay for any lease extension so you can work out the costs yourself. NB: These formulas will tell you only the cost of the lease extension not any associated legal or administrative fees. If you send them your lease details (as they would be in 2 years) they will even give you an estimate of the cost of extending the lease.

We used them and found them very helpful. I found myself in the position of knowing more about the lease extension costs than professionals.

As to worrying about panic setting in over a short lease, you are spot on. Many people I know would not touch a short lease with a bargepole. 80 years seems to be a crucial psycological barrier but many would run scared well before that. The main thing about the lease is to factor the cost of lease extension into the price and see if you are still getting value for money, if not walk away or get a reduction.

About the two year wait to apply for a lease extension, my understanding is that you can apply for a lease extension whenever you want. You have to wait 2 years before you can FORCE the freeholder to extend your lease.

As to you wanting to stay 2 years max in the proerty, well buying for such a short period is up to you and I'm sure you have factored in stamp duty, solicitor's fees, estate agent's fees and all the other expenses of moving twice in a couple of years. Just to say that we applied for our lease extension just before our first 2 years in the property were up. About a year later it was completed. We were dealing with a slow and inefficient organistion and we were to a certain extent at the mercy of others.

And of course the fees. We had to pay for the lease extension itself: £150, we got a good deal there. The lease was in the low 80s and we got an extra 90 years. But we also had to pay:
Our solicitors.
Their solicitors.
Their administration costs.
A valuation of the property.
Other bits and pieces.

Now maybe we got ripped off but our lease extension ended up costing a LOT more than £150.

I understand that our experience may not be the same as everyone's but a co-operative and efficient freeholder can save you hassle, money and time. I hope you have one.

holsum

Hey 10_to_3

10_to_3 wrote:

Worried,

They provide the formulas used to work out the ammount you will have to pay for any lease extension so you can work out the costs yourself. NB: These formulas will tell you only the cost of the lease extension not any associated legal or administrative fees. If you send them your lease details (as they would be in 2 years) they will even give you an estimate of the cost of extending the lease.

Did you find the formulas on the lease site? I've been searching and I can't locate it, can you help?

Thanks

10_to_3

holsum wrote:

Hey 10_to_3

Did you find the formulas on the lease site? I've been searching and I can't locate it, can you help?

Thanks

Here it is:

http://www.lease-advice.org/levaframe.htm

As I said in the earlier post it can be a bit difficult understanding the website at times, but if you provide them with your details they will give you their estimate of the cost of the lease extension (legal fees etc excluded). However it can take a while to process. I also spoke to them on the phone and found them to be friendly and helpful.

holsum

oh my, that all looks a little complicated, I'm going to have to put my thinking cap on!

Worried

10_to_3

You say the lease extension itself was £150, but how much did it cost you with legal fees, admin costs etc?