Extending lease on Share of Freehold flat

Richard_Webster

Originally Posted by chrigil
I spoke to the estate agent today about it and she really played it down as a non-issue becasue I could 'simply renew the lease for free myself once I own the freehold'.

Usually you can do this but the crucial point that Pastmybest has ably made is that you still need the others to sign and sometimes they won't!

It also of course brings up the question of why the current owner doesn't simply make his property far more sellable by doing this '5 minute job' himself. He already has a relationship of some sort with the other freeholders.

This is why it is worth checking with the other flat owners. Of course if seller refuses to sort it out it may be because he suspects one of the other flat owners is going to be difficult!

When I contact the other leasees, presumably it would be done by my solicitor. Whilst it'd be quicker and easier, I'm guessing that knocking on the front door and having a quick chat isn't really the way to proceed?!

Yes, I would knock on their doors because you need to assess how friendly they are and how likely to co-operate. You are not really going to find that out by some solicitor writing them a formal letter they may not understand.

chrisjleu

Yes, I would knock on their doors because you need to assess how friendly they are and how likely to co-operate. You are not really going to find that out by some solicitor writing them a formal letter they may not understand.

I understand the point, but in all seriousness, can you actually picture a scenario where you show up as a stranger at some unsuspecting person's door and begin quizing them: "Hi, sorry to disturb you, but are you familiar with the ins and outs of extending the lease of a share-of-freehold property and are you going to be compliant or a pain in the backside about it?... oh and by the way, I might be your new neighbour (cheesy grin)!"

By the time you've gone through each resident, assuming they're even at home and have the time and inclination to speak to you, they're probably all hoping that you're not going to move in! What if the neighbour is just a tenant of a sublet apartment and the freeholder doesn't even live there?

It just doesn't seem practical. It could take weeks for you to get a clear idea of how everyone feels about it and by then some other person has probably purchased the property from under your nose while you stalk the residents. Even if you do manage to chat to everyone and all seems well and good, you still have no guarantees that one of them doesn't just change their mind.

I'm in this situation currently. The lease on a share-of-freehold property I'm very keen on is 78 years. Not terribly short but short enough that it makes me want to do something about it now so that I can forget about it for the rest of my life knowing that it won't be an issue. The vendors have no rapport with the neighbours as they have been living abroad for years and subletting their apartment so it's not much use asking them what the neighbours are like. There are are 5 other apartments in the building and I have no way of knowing if one or all of these are sublet too. The vendor has stated that their solicitor advises that extending the lease should be simple and they have not looked into it before. Full stop.

I'm very reluctant now to start knocking on people's doors for the reasons I've mentioned. Is there nothing more I can do short of issuing an ultimatum to the vendor that they have to look into the lease extension for me or I pull out of the purchase?

madeupname1

It took me ages to sort out an extension on a lease. The problem is that the freeholders may have no particular incentive to hurry things along. It is also not free. Even if there is no charge from the other freeholders, you will need to hire a solicitor to do the work, there are expenses and I would also note that my mortgage company charged me a few hundred quid for the privilege of them agreeing to the extension, even though it resulted on a more valuable security for them. I would not rely on any assurances from the EA or vendor on this.

chrisjleu

It took me ages to sort out an extension on a lease. The problem is that the freeholders may have no particular incentive to hurry things along.

That's another good point. In my situation the sellers are keen to make the sale quickly. If one goes down the route of trying to get the vendor to start the lease extension process as a condition of the sale, how long will that delay the completion?

I suppose again it boils down to how cooperative the other freeholders are but again you can't know this. Hmmm, any more ideas?

Fire_Fox

chrisjleu wrote: »

I understand the point, but in all seriousness, can you actually picture a scenario where you show up as a stranger at some unsuspecting person's door and begin quizing them: "Hi, sorry to disturb you, but are you familiar with the ins and outs of extending the lease of a share-of-freehold property and are you going to be compliant or a pain in the backside about it?... oh and by the way, I might be your new neighbour (cheesy grin)!"

By the time you've gone through each resident, assuming they're even at home and have the time and inclination to speak to you, they're probably all hoping that you're not going to move in! What if the neighbour is just a tenant of a sublet apartment and the freeholder doesn't even live there?

It just doesn't seem practical. It could take weeks for you to get a clear idea of how everyone feels about it and by then some other person has probably purchased the property from under your nose while you stalk the residents. Even if you do manage to chat to everyone and all seems well and good, you still have no guarantees that one of them doesn't just change their mind.

I'm in this situation currently. The lease on a share-of-freehold property I'm very keen on is 78 years. Not terribly short but short enough that it makes me want to do something about it now so that I can forget about it for the rest of my life knowing that it won't be an issue. The vendors have no rapport with the neighbours as they have been living abroad for years and subletting their apartment so it's not much use asking them what the neighbours are like. There are are 5 other apartments in the building and I have no way of knowing if one or all of these are sublet too. The vendor has stated that their solicitor advises that extending the lease should be simple and they have not looked into it before. Full stop.

I'm very reluctant now to start knocking on people's doors for the reasons I've mentioned. Is there nothing more I can do short of issuing an ultimatum to the vendor that they have to look into the lease extension for me or I pull out of the purchase?

Don't purchase a share of freehold property if you are not willing to do so much as politely introduce yourselves to your neighbours and 'business partners'! You need to know if any other flats are tenanted, this will change the way the landlord approaches repairs and redecoration and it may affect your enjoyment of the flat.

I live in a leasehold property as do my parents and several of my friends. I can assure you by far the best managed buildings are the ones with resident-leaseholders on the board of directors who are committed, communicate regularly and even socialise together. The worst - and most expensive - by far is almost exclusively tenanted and has been remotely (mis)managed.

Richard_Webster

Quote:
Originally Posted by chrisjleu
I understand the point, but in all seriousness, can you actually picture a scenario where you show up as a stranger at some unsuspecting person's door and begin quizing them: "Hi, sorry to disturb you, but are you familiar with the ins and outs of extending the lease of a share-of-freehold property and are you going to be compliant or a pain in the backside about it?... oh and by the way, I might be your new neighbour (cheesy grin)!"

By the time you've gone through each resident, assuming they're even at home and have the time and inclination to speak to you, they're probably all hoping that you're not going to move in! What if the neighbour is just a tenant of a sublet apartment and the freeholder doesn't even live there?

It just doesn't seem practical. It could take weeks for you to get a clear idea of how everyone feels about it and by then some other person has probably purchased the property from under your nose while you stalk the residents. Even if you do manage to chat to everyone and all seems well and good, you still have no guarantees that one of them doesn't just change their mind.

I'm in this situation currently. The lease on a share-of-freehold property I'm very keen on is 78 years. Not terribly short but short enough that it makes me want to do something about it now so that I can forget about it for the rest of my life knowing that it won't be an issue. The vendors have no rapport with the neighbours as they have been living abroad for years and subletting their apartment so it's not much use asking them what the neighbours are like. There are are 5 other apartments in the building and I have no way of knowing if one or all of these are sublet too. The vendor has stated that their solicitor advises that extending the lease should be simple and they have not looked into it before. Full stop.

I'm very reluctant now to start knocking on people's doors for the reasons I've mentioned. Is there nothing more I can do short of issuing an ultimatum to the vendor that they have to look into the lease extension for me or I pull out of the purchase?

Firefox's comment:

Don't purchase a share of freehold property if you are not willing to do so much as politely introduce yourselves to your neighbours and 'business partners'! You need to know if any other flats are tenanted, this will change the way the landlord approaches repairs and redecoration and it may affect your enjoyment of the flat.

I live in a leasehold property as do my parents and several of my friends. I can assure you by far the best managed buildings are the ones with resident-leaseholders on the board of directors who are committed, communicate regularly and even socialise together. The worst - and most expensive - by far is almost exclusively tenanted and has been remotely (mis)managed.
If in doubt ...... hug!!

I agree. I know it may be an awful pain going round to see them all but as Fire Fox says you are going to have to get on with them eventually so you might as well see what they are like now.

We keep finding threads started by people who get into all kinds of difficulties with neighbours etc and want to know what their legal position is. I cannot emphasise too strongly that in this kind of situation having a bucket full of legal rights is not a lot of help if it is very expensive., time consuming, and stressful, to enforce them. It is dangerous to rely upon strict legal interpretations of leases if you want to get things done and others won't budge or are doing things differently in a way that you think is wrong. Therefore there are situations where it is better not to get into them in the first place!

This thread started with this question:

I'm interested in buying a flat which is Share of Freehold but only has a lease of 63 years left on the lease. Presumably the SOF was done after the initial 99 lease was arranged, thus making the lease pretty much irrelevant.

My question(s) are as follows:

1) Would I need to extend the lease or is it totally irrelevant?

The very fact that OP started this thread means that there are many out there who don't understand shared freehold. So existing shared freehold flat owners fall broadly into four categories over agreeing lease extensions:
1. They do understand and will readily sign documents;
2. They don't understand, thinking that as they are shared freeholders they don't need leases to be extended, but when it is explained they will agree to do it, because they want to co-operate;
3. They don't understand and simply refuse to understand and won't sign because "We don't have leases....";
4. They have some other argument with the other lessees and won't sign because of that.

It is therefore very important if you are going to want a lease extension once you have bought to make sure the lessees fall into categories 1 & 2 and you may have to do some work in converting 3s into 2s!

Obviously it is a lot easier for the seller to organise a lease extension because he then has to do the legwork. However it is still important, particularly with houses converted into a few flats for the lessees to get on and agree sensible arrangements about maintenance and insurance.

chrisjleu

Fire Fox: Don't purchase a share of freehold property if you are not willing to do so much as politely introduce yourselves to your neighbours and 'business partners'! You need to know if any other flats are tenanted, this will change the way the landlord approaches repairs and redecoration and it may affect your enjoyment of the flat.

Ok, so you do knock on people's doors and find they are tenanted. Then what? You've determined nothing and you still want to buy the property.

Fire Fox: I live in a leasehold property as do my parents and several of my friends. I can assure you by far the best managed buildings are the ones with resident-leaseholders on the board of directors who are committed, communicate regularly and even socialise together. The worst - and most expensive - by far is almost exclusively tenanted and has been remotely (mis)managed.

That may be nice in an idyllic world where we all play together nicely, but the reality is that most people in a block of flats (leasehold or otherwise) rarely even see each other, yet alone know each other or further get along to the point where they socialise together. If you were to run a little fact finding trip and discover that the world of that flat is not so utopian - I'm not saying they have to be at each other's throats - then what does it really mean to you as a buyer? Is it a deal breaker? I don't think so. It just means that the people in the block are not particularly social with each other and they happen to know next to nothing about leases. Barring the odd exception, I would say that is the more common situation wouldn't you? In the end you're likely to be no better off than you were before you invested all the effort in finding that out.

We keep finding threads started by people who get into all kinds of difficulties with neighbours etc and want to know what their legal position is. I cannot emphasise too strongly that in this kind of situation having a bucket full of legal rights is not a lot of help if it is very expensive., time consuming, and stressful, to enforce them. It is dangerous to rely upon strict legal interpretations of leases if you want to get things done and others won't budge or are doing things differently in a way that you think is wrong.

I find it somewhat ironic that a solicitor is advising us against the dangers of relying on the law - isn't the law in place precisely to make these kind of 'friendly', informal fact-finding missions that are being recommended completely unnecessary?!

Ok, I can accept that it's to your advantage to do your own ground work at some point but surely this cannot be your first port of call. There must be a document that my solicitor can get hold of that details the agreements set up between the freeholders and lists all their addresses and contact details and, perhaps, other useful information such as how long each flat has left on their lease and when the last least extension was conducted. What I'm saying is, shouldn't all this be readily available so that the solicitor can make his enquiries and you as the vendor can be aware of the position that you are in before you trek off to the property to bug the residents?

savingGrace

I am a flat owner with a very recently acquired share of freehold. I have been worrrying over this extenstion of lease problem. I have been considering selling, and had various conflicting advice- some of which from the same Estate Agent. That is before I got it, he told me that even if I did, I would "have to" extend the lease, or at least strongly advisable as it is only 72 years old. This was about 10 months ago. I acquired a 50% share of freehold 6 months ago. He then discouraged me from getting an extension. . He said it could equally easily be done by the buyer. Said no point me doing it. I was not convinced that was in my interest, as a couple of others have said in the forum: the asking price should reflect the length of lease. I understand it should not cost much-other than employing a solicitor's help.

At the time I asked him for an updated valuation on my flat, now with the share of freehold. At the time of obtaining it, he said, almost excitedly, it would add another £15,000 "straightaway". Naturally I was very encouraged. Unfortunately i did not get this in writing.

I would have liked to move straightaway, but within days- the new owners of the other flat moved in, with their 50% share freehold. And without giving me any clue as to the duration of works, they proceeded to gut their flat and aside from the noise stress, which affected me a great deal in itself, the process of their demolition for want of a better word, has spoilt work I had very recently had done , mainly outside but even some inside with hammering on the ceiling revealing the joins of the parts, in 3 rooms. Rubbish has mounted up outside over 3 months, and only just got rid of. I have tried desperately not to moan, for sake of keeping good relations. But I am afraid they have played on this. i did lose my temper one day recently, but did not express my issues well. I have tried to put it to them that "share of freehold" also means a shared interest, and it would have made things very much easier for both of us if they had informed me of their plans long before they moved in, since the flat was actually sold last summer to them. The kind of replies I have received is- "it is two flats not one house". Well, it is clearly both, and it was my interest to change one of my windows, and i had hoped to discuss with them when they came, so that we could keep the front of the house all one style. Their reply was they didn't have time, because the window was rotting, and they only just discovered it. How long would it have taken them to tell me that and for us to work together. Ok I might not have wanted to , or had money to meet their plans, but I certainly would have tried to, and it would have cut both our costs on each of our windows if had got them done at the same time. Well I was flabbergasted that not only did it not occur to them, but they appear to consider it an infringement on their personal choices.

I am sorry, I have digressed.

The thing is I think that they want my flat, ~(should I ask outright?) and(I THINK) the estate agent has their interests at heart more than mine, (they bought through him), since he says he thinks they have not got much money. (... I have lost a lot of work through resulting stress! and new caring commitments ). Does he think I DO have a lot of money? I don't feel I have a lot, but surely I have a right to make the most of my sale, and if extending the leasehold is inexpensive, surely it makes sense. And is the share of freehold worth the paper it is written on otherwise?

I really do want to sell now, but IF the other freeholders will co-operate and let me purchase an extension on my lease, I would prefer to hold out. (if market prices don't drop too dramatically).
The Estate Agent who said in Feb that the share of freehold would add £15k, now just talks round he subject. I know markets have changed, but that much? £15 K 's worth. ?

Unfortunately I find it hard to even talk to these peope now, without feeling my BP rise. I understand I need their agreement to allow me to extend my lease,so it could be difficult. They extended theirs when they purchased. Should I not then have had to sign my agreement?

It would become more expensive if I need to involve solicitors to try to resolve the situation, then maybe it's not worth it. I still try to get on with them, but they can't help but know I am not happy. They have agreed to fix some of the damage WHEN THEY HAVE FINISHED, but can never tell me when they will finish. The word SOON has been popping up since they arrived. ( I actually heard one of the young owners talk about "stringing her along a bit longer". Well I can't be 100% sure it was about me, but in any case an unpleasant comment, but I strongly suspect it was about me.

Does anyone have any ideas how to handle the situation?

I am sorry it is so long. And hope someone will be patient with me. I would be so grateful.

mearnsy

The best start is to read your lease agreement. With a share of the freehold you and your neighbour are affectively both landlord and tenant but you lease should state common grounds i.e. joint responsibility for roof/grounds, respect of noise, common access etc. I would ignore the estate agent (this is based on my opinion of estate agents who I don't believe would have your best interests at heart). You should also have joint responsibility for buildings insurance.

The lease extension part is odd as you own your share of the freehold? Normally freeholds in flats are owned by a third party and leasehold extension is simply a way of generating income for the landlord as I see it. I would take legal advice on that as it seems like whoever did the orginal share of freehold did it badly. We have recently bought out our landlord (terraced victorian flat in london) where there are 2 flats in the building and the lease was set at 999 years due to the above point. This website is a good start- ( i removed the www as I cannot post links)- lease-advice.org

Re the other points its clear that you are unfortunate in that you don't see eye to eye with your neighbour- sadly this can sometimes happen- all you can do here is revert to the lease agreement (there's should be the same) and raise any salient points there!

savingGrace

For now - to say thank you very much Mearnsy. I have used the web site you suggested and it is more helpful than any other I have tried because it includes relevant Q'A AND A's to my situation. And as you say, looks like a good starting place. Most websites I have tried concerning lease extension, do not consider what to do when have a share of freehold. I am going to place an enquiry with them today. Fingers crossed I will be wiser and be able to take a next step later today.

I am pretty sure you are right about the Estate Agent. When I first met him, I thought I could trust him, but not so sure now.

Thanks so much.