Leasehold with share of freehold query

jacko89

Myself and my girlfriend are considering purchasing a flat which is leasehold with a share of freehold. We currently rent the flat and the owner is willing to sell. We have agreed an asking price.

There is currently 68 years left on the lease and the freehold is shared among the flat owners in the building. A share of the freehold would be included with the flat.

I have some concerns due to the relatively short length of the lease and also in relation to how much it may cost to extend.
I understand that a lease below 70 years may affect the saleability of the flat and I am currently trying to get some feedback in terms of the freeholders plans to extend the lease and when this may happen. Is it problematic to extend the lease if the freehold is owned by the flat owners or should this make the process easier?

It would be useful to get some advice in terms of whether we should go ahead with the purchase with the lease this low or whether, as part of the sale agreement, we insist the lease is increased prior to buying.

The other flats in the building are let to tenants by the owners apart from one who is an owner occupier.
The current 'chairman' of the freehold company owns two flats which he lets out.

I also understand that we have to own the flat for two years before we can extend the lease if we do go ahead with the purchase. At this point the lease would be down to 66 years
This is a concern if the current owners are not willing to extend the lease asap (or prior to purchase).

Could the freeholders extend the lease within the two year period without including us? Could this then incur extra costs?

Any information would be very useful as we are first time buyers and the possibilities/legal aspect can be quite overwhelming!

Richard_Webster

Seller may not bothered because of the time it will take or because he suspects/knows some of the other company members are going to be difficult.

Therefore sensible for you to go personally and ask the company directors what their attitude would be to giving you a lease extension straight away for no more than the cost of the legal work. If they say "Yes" get your solicitor to get this in writing from the company - not really binding in law but will have strong moral persuasiveness.

One or more may say no because:

a) he already has his lease extended so hopes that company can make some money out of you by making you go through the legal process in 2 years time; or
b) he is having an argument with other directors about something else and wants to use this as a bargaining counter (- maybe they want their leases extended too!); or
c) he is pig headed and stupid and says things like "We're shared freeholders so we don't have leases...." They do exist, I'm afraid.

It will save a little on costs (not having to transfer mortgage to "new" lease later with admin costs from lender and more legal costs) for you to get the company to grant you a lease extension at the same time as your purchase. I managed to do this recently when the Abbey were selling the flat as a repo and the company simply granted a new lease to my client to complete at the same time as his purchase of the old lease from Abbey.

CLAPTON

I would be surprised in a mortgage company would give you a loan for a lease of only 68 years

timmyt

jacko89 wrote: »

Myself and my girlfriend are considering purchasing a flat which is leasehold with a share of freehold. We currently rent the flat and the owner is willing to sell. We have agreed an asking price.

There is currently 68 years left on the lease and the freehold is shared among the flat owners in the building. A share of the freehold would be included with the flat.

I have some concerns due to the relatively short length of the lease and also in relation to how much it may cost to extend.
I understand that a lease below 70 years may affect the saleability of the flat and I am currently trying to get some feedback in terms of the freeholders plans to extend the lease and when this may happen. Is it problematic to extend the lease if the freehold is owned by the flat owners or should this make the process easier?

It would be useful to get some advice in terms of whether we should go ahead with the purchase with the lease this low or whether, as part of the sale agreement, we insist the lease is increased prior to buying.

The other flats in the building are let to tenants by the owners apart from one who is an owner occupier.
The current 'chairman' of the freehold company owns two flats which he lets out.

I also understand that we have to own the flat for two years before we can extend the lease if we do go ahead with the purchase. At this point the lease would be down to 66 years
This is a concern if the current owners are not willing to extend the lease asap (or prior to purchase).

Could the freeholders extend the lease within the two year period without including us? Could this then incur extra costs?

Any information would be very useful as we are first time buyers and the possibilities/legal aspect can be quite overwhelming!

simple. just have the seller hve the freehold company chairman instruct lawyers (t the sellers expense of course) to set in motion a lease extension. it need not take long, and legal fees £500 per lawyer. NO money would change hands.

we do this all the time.

but use a solicitor - make sure they are a solicitor - as most people pay the price for one, but rarely get anything other than a jumped up secretary.

good luck