Selling Property With Short Lease

samsmoot · 9 August 2011 at 5:37PM

My other half says this won't work, but I have been told it will. Really need to see a conveyencer about this but wondered if anyone on here had ever come across this scenario:

Need to sell a property with 43 years left on lease. Mortgages can't usually be gotten with such a short period left to run so the freehold needs to be acquired.

Problem is there is no money. Have been told on another forum that the process of acquiring the freehold can be started for a minimal amount, then completed by a subsequent purchaser. Has anyone come across this before?

You apparently agree to buy the FH with the land owner then have a couple of months to complete it, in which time the new owner will pay the difference.

It does seem a tricky business as you would have to make sure you had a buyer lined up because if you don't you will still be committed to buying the FH yourself.

Any thoughts?

DVardysShadow · 9 August 2011 at 5:43PM

Yes, we have discussed this here before iirc. It is doable, I believe, but the legal work will cost more than a simple sale.

I am not sure whether the leasehold extension must be executed between exchange of contracts and completion or whether it can be put through on the day of completion - when funds are available from the buyer. If it must be done before completion, you might need your buyer's deposit - and with a 43 year lease, the deposit may not cover the extension cost.

propertyman · 9 August 2011 at 11:02PM

If the purchaser is satisfied with the success of the claim then it can be made at the same time as exchange. it makes it harder for the purchaser to raise finance and the landlrod may disagree and it goes to the LVT which takes time.

Can you not raise the finance based on the increased value post extension?