Lease extensions

Sindin

Hi,

I live in a block of 15 flats, all of the flats have ~65 years left on the lease. I want to extend the lease on my flat but a lot of the other owners are taking the view "we're going to be dead when it runs out so i'm not going to extend it" which is rather unhelpful. We all own the freehold to our own flats. If i was to extend the lease would I still have to pay the marrage fee? If do have to pay this does anyone have any idea how much percentage wise (of value) an increase to 99 years would be?

Thanks,
Hannah

cat10_2

65 years left on a lease is quite low and it could be costly for a 99 year extension ( £14,000?).

I can understand the other owners' view "we're going to be dead when it runs out so I'm not going to extend it" but presumably they intend to leave their flats to their next of kin. If this is the case the property value will be significantly decreased if the lease has less than 65 years left.

Also, many mortgage lenders will not approve mortgages on property that has a lease of less than 65 years, so the property could become unsellable.

Fire_Fox

Are you sure you own the freehold to your own flat or do you own a share of the freehold for the entire building? These are not the same thing at all. AFAIK the other leaseholders cannot stop you extending your lease, I presume you still need to serve formal notice on the freeholder (?a company) just as any leaseholder would. The legislation provides for leaseholders to extend by 90 years not to 99 years. As you own a share of the freehold you may not have to pay for extending your lease, other than the legal costs of both parties. Try reading the LEASE website and/ or speaking to the solicitor which handled you buying the freehold and/ or making use of their free telephone advice line if your queries are not addressed
http://www.lease-advice.org/publications/documents/document.asp?item=8

Sindin

cat10 wrote: »

65 years left on a lease is quite low and it could be costly for a 99 year extension ( £14,000?).

I can understand the other owners' view "we're going to be dead when it runs out so I'm not going to extend it" but presumably they intend to leave their flats to their next of kin. If this is the case the property value will be significantly decreased if the lease has less than 65 years left.

Also, many mortgage lenders will not approve mortgages on property that has a lease of less than 65 years, so the property could become unsellable.

Who would the fee be payable to though?

I have explained both those points to my neighbours, however they just don't seem to understand and still insist that it won't devalue at all and they'll just sell to a cash buyer not someone who needs a mortgage.

Fire_Fox

Sindin wrote: »

Who would the fee be payable to though?

I have explained both those points to my neighbours, however they just don't seem to understand and still insist that it won't devalue at all and they'll just sell to a cash buyer not someone who needs a mortgage.

Which will devalue your flat compared with the rest of the market as there are few cash buyers, those there are will be looking for a bargain! It's quite obvious none of the leaseholders have a clue about leasehold matters so it seems silly to continue to debate it. Discuss the length of the lease with an estate agent or search a property auction catalogue if you want confirmation. Then get on and serve formal notice.

DVardysShadow

Fire_Fox wrote: »

Which will devalue your flat compared with the rest of the market as there are few cash buyers, those there are will be looking for a bargain! It's quite obvious none of the leaseholders have a clue about leasehold matters so it seems silly to continue to debate it. Discuss the length of the lease with an estate agent or search a property auction catalogue if you want confirmation. Then get on and serve formal notice.

Actually, I would be quite concerned to be in a block of flats where everyone has their heads in the sand. I can understand the attitude of 'it will last me out'. But then the heirs will be left with a flat with perhaps 55 years on the lease - which will then have to go to a cash buyer. And sooner or later you have a block with a substantial number of cashbuyers who were in on the cheap.

It seems there is an issue of comprehension here - assuming everyone has a share of the freehold, then it would be quite cheap for everyone to agree to extend their leases en bloc. Surely?

Sindin

DVardysShadow wrote: »

then it would be quite cheap for everyone to agree to extend their leases en bloc. Surely?

We had a quote of ~£500 + land registry fee per flat to extend the lease, which i am more than happy with, but most others refuse to pay it for the reason i said earlier. My concern is if i want to extend it on my own then i have the marriage value to pay, but I don't know who that would get payable to. I understand that if the freeholder was different to the leaseholder it get split between the two. But when the freeholder = leaseholder (or partial leaseholder) where does it go?

Richard_Webster

I assume that the freehold is owned by a company which is in turn owned by the flat owners.

If OP can get a majority of flat owners together he can presumably get an annual meeting called and resolve to do the lease extensions.

Alternatively OP will have to serve the statutory notices requesting an extension on the company and perhaps then they will see a solicitor who will talk some sense into the directors.

This is a good example of the misunderstanding that prevails about "shared freehold." It is a common misconception that lease length doesn't matter at all if it is shared freehold and/or that you are automatically entitled to a lease extension at minimal cost if you are a shared freeholder. This thread illustrates that it doesn't necessarily follow -there are people out there who are just plain stupid and won't be told.

Did OP's solicitor advise him that lease extension for minimal cost was not 100% guaranteed when he bought? When acting on the purchase of a flat which is "shared freehold" I always ask the other flat owners/company if a lease extension will be given for no more than the legal costs. Usually they say "Yes" but occasionally we get nonsense like: "we don't have leases we're shared freeholders...."

AngieR

Hi,

We have two flats in a block with only 42 years left on the leases. We have been quoted by the Freeholder 25k each to extend the leases. this is a huge amount of money considering the flats are only worth about 100k each.

My husband is so p'd off about this that he is now saying that he will just let the lease run it's course and the Freeholder will get the flats in 42 years! However, I seem to remember reading somewhere that the Freeholder can reclaim the flats prior to the end of the lease if there is only a very short number of years left. Is this the case?

I am trying to persuade my husband to go ahead with the lease extensions but 50k is not easily accessible. We have offered 20k each but this has been rejected offhand by the Agent (they didn't even refer it to the Freeholder). I know we could enforce the Act and have the lease negotiated but we are frightened of heafty legal fees on top of the 25k (if it doesn't go our way).

This is becoming a nightmare - can anyone confirm if the Freeholder can reclaim the property before the lease end?

M.Holloway

Have you used this lease extension calculator to work out an alternative estimate?

If you let the lease run out the properties will lose value and you'll end up with very little!

Richard_Webster

We have two flats in a block with only 42 years left on the leases.

Did you buy these or inherit them? If you bought them, how long ago was this? If recently, did your solicitor advise you that the leases were too short?