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Leasehold Extension Confusion
Options
AngieR
Posts: 15 Forumite
Hi, Just need some sound advice as I'm totally confused as to what to do for the best. Here's a quick summary:-
We own two flats in one block both have only 42 years remaining on lease (we didn't know this was a problem and no one told us it would be when we bought the flats 15 years ago). Both flats are now mortgage free meaning that for the first time in 15 years we can keep all the rent (less maintenance, tax, fees etc. etc.) We have been given two options by Freeholder:-
a) Extend lease to 125years, keep gound rent at 75 per annum - total cost 46,500k.
b) Extend lease by 90 years with with peppercorn GR - total cost 48,500k
(we understand that we could serve Notice and all that but we already have paid out such a lot on surveyor's fees etc. that we just want to finish it)
We would like to be able to sell the properties at some point in the future but not in present market.
I want to go for Option a) as I believe we would sell before the ground rent charge became more than the initial saving.
My husband wants to forget the whole thing, not extend the lease at all, carry on renting them out for 42 years and hand the keys back! (He's that fed up with the whole thing).
The point is - does he have a point? Should we just carry on as we are, will the flats to our kids and forget about the leases. Is this crazy or actually quite sensible? 50K is a lot of money to buy something we already thought was ours!!
Lastly, the flats are quite old but in a prime location in Eastbourne (if there is such a thing in Eastbourne!) - what if sometime in the future a developer came to buy the whole block and the land - would a short lease mean we would get a reduced offer from the developer?
I know this is a big posting but we really are confused - any thoughts from you all would be useful.
Thanks
We own two flats in one block both have only 42 years remaining on lease (we didn't know this was a problem and no one told us it would be when we bought the flats 15 years ago). Both flats are now mortgage free meaning that for the first time in 15 years we can keep all the rent (less maintenance, tax, fees etc. etc.) We have been given two options by Freeholder:-
a) Extend lease to 125years, keep gound rent at 75 per annum - total cost 46,500k.
b) Extend lease by 90 years with with peppercorn GR - total cost 48,500k
(we understand that we could serve Notice and all that but we already have paid out such a lot on surveyor's fees etc. that we just want to finish it)
We would like to be able to sell the properties at some point in the future but not in present market.
I want to go for Option a) as I believe we would sell before the ground rent charge became more than the initial saving.
My husband wants to forget the whole thing, not extend the lease at all, carry on renting them out for 42 years and hand the keys back! (He's that fed up with the whole thing).
The point is - does he have a point? Should we just carry on as we are, will the flats to our kids and forget about the leases. Is this crazy or actually quite sensible? 50K is a lot of money to buy something we already thought was ours!!
Lastly, the flats are quite old but in a prime location in Eastbourne (if there is such a thing in Eastbourne!) - what if sometime in the future a developer came to buy the whole block and the land - would a short lease mean we would get a reduced offer from the developer?
I know this is a big posting but we really are confused - any thoughts from you all would be useful.
Thanks
0
Comments
-
Well a ky financial question is obviously what are the flats worth now, and what would they be worth with the extended lease?
If you're paying £50K ish (incl legals etc) to extend, and the flats will only be worth £75K afterwards, well, hubby has a point!
Have a read here.0 -
I echo have a look at this website http://www.lease-advice.org/information/faqs/#LeaseExtension0
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Consider suing the solicitor who allowed you to buy flats with only 57 years left on the lease.RICHARD WEBSTER
As a retired conveyancing solicitor I believe the information given in the post to be useful assuming any properties concerned are in England/Wales but I accept no liability for it.0
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