Shared Ownership Lease Extension

Tommoh

Good Evening,

We are in the early stages of selling our flat and have come across a potential problem. When we bought it 10 years ago, we were also offered the freehold, but chose instead to go into partnership with the owners of the other two properties in the building on a 33.3% share basis.
Now it is time to sell, we realise that our lease is only for 67 years whereas the other two leases were extended some time ago. Obviously this will cause mortgage problems for prospective purchasers.

We have had an informal chat with the other 2 leaseholders and while one (ironically enough, a property developer) is more than happy to accept our extending the lease free of charge, the other may prove to be more problematic.
She is, to be diplomatic, somewhat paranoid especially towards the other leaseholder, believing him to be trying to rob her blind at every turn, whereas what he has been doing, very kindly, is using his contacts and the size of his property portfolio to get us large discounts on buildings insurance and building work. (And yes, we do get quotes to check, but as he has a small team of builders working for him, it does make perfect sense to go through him.)

Now this may be the killer, apparently when she renewed her lease a long time back she was charged by the then-owner of the freehold - i.e. the person who used to own our flat (since deceased.) She has been moaning about this, and how she feels ripped off so I now worry that she will likewise charge us a similar amount (a good few thousand pounds that we can obviously ill-afford.)
I realise that by law she has a right to charge us if she wishes, and although my partner and I have always been perfectly civil and pleasant to her; helping her out with setting up computers, changing light fittings and the like, we are worried that she will be taking legal advice and will decide to charge us.
Is there any way that we, along perhaps with input from the other leaseholder, can stop her doing this or is it a question of silver-tongued persuasion and hope for the best?
Thanks

T.

Richard_Webster

You can only try to sweet talk her. Small shared freeholds can be very good or very bad and unfortunately the personalities of those involved are often crucial.

Worst case scenario is that you have to pay her 1/3rd of the going rate for a statutory lease extension.

Tommoh

Thanks for the advice. We do have some, ahem, leverage on her owing to a minor infringement of the lease terms so if all else fails and she insists on trying to get us to pay, despite the fact that she wouldn't have been in a position to if we hadn't offered a share of the freehold, we could conceivably get a bit underhand!

Tommoh

Bah! This is getting nowhere.
We tried speaking reasonably to her, but she refuses to listen and wants to get solicitors involved, which of course means additional expense for her which she will obviously want to reclaim. We cannot afford to be hiring legals left right and centre. Is there a simple guide to this anywhere?

I don't think she grasps the fact that although we are all now freeholders, we still need to extend the lease on the property.

As a matter of last resort, if she has put wooden flooring in her flat, which is technically against the terms of the lease, can we make her rip it up and replace it, despite the fact that it was put in some time ago? Obviously this is a nasty and underhand tactic, and really something I wouldn't want to do but it may enable me to put pressure on her to sign, as we are now showing our flat to potential buyers and do not want this hanging over us.

carefullycautious

I would have thought threatening her re laminate would be the last thing you should be doing. You are trying to engage her not enrage her.

If you are going to extend the lease surely this is going to cost you for the solicitor anyway to make it legal?

What exactly are you trying to do that will not cost you a penny

Richard_Webster

We tried speaking reasonably to her, but she refuses to listen and wants to get solicitors involved, which of course means additional expense for her which she will obviously want to reclaim. We cannot afford to be hiring legals left right and centre. Is there a simple guide to this anywhere?

If she gets her solicitors involved you will have to pay their costs but this is not at all unusual. The positive side of this is that perhaps they will explain things to her so that she is more amenable to signing.

No good winding her up over the laminate because the cost of going to court over something like that would be hugely disproportionate to the benefit and you would have to reveal the "dispute" to your buyers.

Tommoh

Maybe I should clarify,

As a share of freehold owner, she has a right, which can be waived, to charge us to extend the lease, by my calculations up to £16k. This will totally scupper our moving plans. Considering how we have helped her over the years, by fixing things in her flat (light, computers etc.) storing quite a few boxes of hers in our cellar - which are still there, and considering the other freehold owner has already waived his right to charge us hopefully she will understand this.

Additionally, we have agreed to help pay for the re-decorating of the communal area to take place in the next few weeks. Obviously as we are moving, we will see almost no benefit from this, but consider it neighbourly to do so, also any prospective buyer will not get clobbered with a sudden bill just after moving in.

Richard, I get your point about her solicitors and agree that she will probably take advice from them far more readily than she would from us, even though it will possibly be exactly the same advice. I'm just concerned that if they were to advise her to try and charge us the full £16k, which would obviously be in their clients best financial interest, we would then be unable to move and stuck in a building with someone we resent.

Richard_Webster

All three of you would be charging you £16K - so you wouldn't be paying yourself and if the other person waives requiring a share of the money she can only insist on a third of the figure.

Tommoh

Yup, that's what I factored in unfortunately. Using the calculator at lease advice . org (can't post links as a newbie!) currently value of lease is 40-49k