Extend Your Lease guide discussion

Richard_Webster

Hi Richard,

Thanks for your comments. I bought it in Sept 2006, my recollection is that i was not advised to extend it at the time of purchase.

I think you could have a case. Then Bank of Ireland/Bristol & West was the only major lender requiring 70 years - most wanted 30 years plus length of mortgage - effectively 55 years - although some stipulated 60 years. Halifax & Lloyds TSB now require 70 years so things have tightened.

Nevertheless if you bought with 66 years and were going to sell in 2-5 years it was likely that a buyer would be advised that he would be caught paying a large amount for an extension to sell so would have wanted the price reduced to allow for that. Therefore I think your solicitors should have advised you about that factor - they couldn't tell you the amount other than it was likely to be substantial but could e.g. refer you to Lease Advice.org's calculator.

IanIan

The world of lease extensions and purchase of freeholds of houses and blocks of flats is littered with lawyers and surveyors who think they know what they're doing, but don't. Such folk frequently end up being sued for negligence, which is one of the reasons why professional indemnity insurance is so very expensive. Homeowners therefore need to be very careful when employing professionals to act on their behalf. Before instructing such professionals, homeowners should ask the professionals questions such as "how long have you been involved with this type of work?", "how many similar transactions have you dealt with?", "how many times have you had to take a transaction to the leasehold valuation tribunal, and what were the results?", "what is your fee?", "how long will the whole procedure take?", "why is your fee so high?", "have any previous clients complained about your service in the past?"

I can see that these remarks may appear to be rather cynical, but I know several people who have gone through the lease extension process and ended up getting their fingers burnt thanks to poor quality professional advice.

richardw

IanIan wrote: »

The world of X is littered with lawyers and surveyors who think they know what they're doing, but don't. Such folk frequently end up being sued for negligence, which is one of the reasons why professional indemnity insurance is so very expensive. Homeowners therefore need to be very careful when employing professionals to act on their behalf. Before instructing such professionals, homeowners should ask the professionals questions such as "how long have you been involved with this type of work?", "how many similar transactions have you dealt with?", "how many times have you had to take a transaction to the Y tribunal, and what were the results?", "what is your fee?", "how long will the whole procedure take?", "why is your fee so high?", "have any previous clients complained about your service in the past?"

Excellent reminder that care needs to be taken. Applies for anything that could be X and Y as well.

mystic_trev

When I extended my Leases we canvessed the whole block(s) to see if anyone else was interested in extending. We got a group of 15 and managed to make substantial savings on Valuations and Legal costs.:money:

NormW

Richard_Webster wrote: »

How long ago did you buy it?

If fairly recently then did your solicitor advise you that it was likely to be expensive the extend the lease and you would probably need to do so in order to sell? If you bought recently and he didn't then you might well have a claim against him.

I too am in a very similar position to centrehalf, I bought 6 years ago and now my lease has approx 59 years and 11 months left. It had 66 years when I bought which means it would've dropped down to 64 before I was eligible to extend. I cannot recall nor find anything in the paperwork from the purchase advising me that the lease would need to be or be expensive to extend. Had I been advised this I'd have negotiated a lower price for the property or found a different property.

At the time I was a first time buyer and totally reliant on the advice of the conveyancer and financial adviser I got the mortgage through. It's only since yesterday when I got my weekely MSE email I've done a lot of reading and discovered I have a problem that I feel should've been highlighted strongly to me, I would not have bought this property with the knowledge that in 5 years I would have to pay out £10-12000 to extend the lease.

Do you think I might have a case against the conveyancer for badly advising me?

All help and advice greatly appreciated,

Norman.

kezza2012

I own a flat on a part buy/part rent scheme owning 50%
my lease is now in the 70's so who is responsible for extending the lease and covering the cost?
in the next few years i would like to go about buying the other 50% so this is something i would like to sort out sooner rather then later

Richard_Webster

Do you think I might have a case against the conveyancer for badly advising me?

You could well have a case - but you need to read the reports that they sent you.

They could have covered themselves with some vague comments like:

"The length of the term of tears remaining on lease may have an effect on its value in the future. You should consult a surveyor about this."

Quite possibly enough for them to protect their backs.

The explanation should have been something like:

"This lease has only 66 years left to run. Even now not all lenders would accept it but by the time it gets down to 60 yaers it will be virtually unmortgageable. Even if a buyer could get a mortgage he will be advised that he may have to pay out a substantial sum (4 or possibly 5 figures) to extend the lease in order for him to sell it and this will affect your ability to sell it in the future. You need to take this into account if you decide to proceed with this purchase."

richardw

kezza2012 wrote: »

I own a flat on a part buy/part rent scheme owning 50%
my lease is now in the 70's so who is responsible for extending the lease and covering the cost?
in the next few years i would like to go about buying the other 50% so this is something i would like to sort out sooner rather then later

Does the freeholder own the other 50% of the Lease?

spendaddict

I am looking to sell my property soon I have 63 years left on my lease, I am aware that this will have a reduced value to my property. I have thought about extending the lease on completion of the sale as a option which would reflect (as much as I can) in the asking price and save the buyer having to wait 2 years before they could purchase the lease. Is this a viable option?

Also looking into the 100 mortgage lenders 66 of them would lend on the property as it is above their minimum unexpired lease terms (most of them being 50-55 years including the mortage term), 7 out of the 10 of these being the UK's biggest banks. I appreciate that the buyers do need to be aware that the lease would need to be extended at some point and the costs involved but the EAs were making it sound like buyers would not be able to get a mortgage at all and I would have to rely on cash buyers which is clearly not the case.

I will never buy a leasehold property again its a nightmare.

richardw

spendaddict wrote: »

... I have thought about extending the lease on completion of the sale as a option which would reflect (as much as I can) in the asking price and save the buyer having to wait 2 years before they could purchase the lease. Is this a viable option?

From http://www.lease-advice.org/publications/documents/document.asp?item=8#12

"Once the Tenant's Notice has been served (and registered) it may be assigned with the lease. This means that a leaseholder can serve the notice and then sell the flat with the benefits of the application. The purchaser will be able to proceed with the application immediately, without having to meet the two years ownership qualification."

So it appears that you have to start the ball rolling, buyers may only be interested after the process has gone through some of the stages and the risk of a tribunal is diminished.