Extend Your Lease guide discussion

owl_fan

Please could the experts on here give me some advice about my situation?
I am living in a flat which was sold to me including the freehold of the building, which is divided into 3 flats. The previous owner had been the owner of the whole building prior to being divided into flats. The other flat-owners have asked me to share the freehold title and at the same time we have decided to extend all of our leases (currently 85 years) to 999 years. I have a lease which was drawn up when I bought the flat, but has the same terms as the other 2 leases. I assume that I have a lease to protect the leaseholders, so that we are all bound by the same conditions.

I have agreed to this request and we have had a valuation by a chartered surveyor. He gave us a single figure for the value of the freehold, from which he calculated a premium to be paid to me by each party. I am happy with this figure, all parties have agreed to go ahead and we have instructed one solicitor to do the work. We are doing this by mutual agreement rather than by following the route of the Leasehold Act 1993, because I was advised by the Leasehold Advisory Service that one solicitor could do this. I have also agreed to pay a share of the legal costs, although as freeholder I am not obliged to do so. I want to remain on good terms with my neighbours and I was advised that if I ask them to pay all costs they could decide to buy the entire freehold.

We decided not to set up a limited company to own the freehold.
In this scenario, I read on the LAS website that it is advisable to draw up a Declaration of Trust because the freehold being held jointly by 3 flats means that if anyone sells their flat, it must be possible to pass on the "share" of the freehold to the new owner without having to get the agreement of the other parties.

What do I need to do in order to ensure that all the correct procedures have been followed? I'm asking this because it's a rather unusual situation and reading all the posts on this board I haven't come across a similar situation.

GoneWithTheWindFabulous

Hi after some advice

Have 82 years remaining on lease and and pay £150 ground rent a year.

I spoke with freeholder in summer and asked for a cost to increase however he didn't get back to me.

I have spoken to him since and also backed up in writing asking for a response within 2-3 weeks (which is when he said he would get back to me)

I had not heard anything so called to enquire, he said he would get back to me

Just wondering how long I should leave it? Keen to proceed asap - I also have shared equity 2nd charge on property (with government scheme)

I have started looking for surveyors and will make enquiries with a solicitor.

Any advice appreciated on next steps

Thanks

buglawton

Issue a Section 42 notice to the freeholder will force him respond.

Try this link for more info
http://www.reviewmylife.co.uk/blog/2011/10/04/extending-a-leasehold-section-42-and-the-lvt/

Kojak12

80 years left is an important cut off. You need to get it all done before the lease life drops below that - it will cost you a lot more then which is why the leaseholder might be stalling. There are laws to protect to you from this but you need to get the process started so you will complete it before the 80 year life is reached. The best website to get you started is this one;
http://www.lease-advice.org/
They have lots of information on the legal stuff, timescales, steps involved and how to resolve disagreements with or stalling by the leaseholder. They also list qualified practitioners - look for one who has experience in your postcode.

IanIan

You don't need to complete the new lease before the old one falls below the 80 year mark, you just need to serve the statutory notice before the existing lease drops below 80 years. So if you serve the notice when the existing lease has 80 years and one day unexpired, you're fine. No marriage value to pay. If it takes six months for the new lease to be granted, no problem. Still no marriage value to pay.

buglawton

I used the MSE lease extension cost calculator once, which includes marriage value I guess... and there was a £2000-£3000 difference just before and after 80 years. Not quite as drastic as I'd thought.

http://www.moneysavingexpert.com/mortgages/extend-your-lease#calculator

libellule69

I have a flat worth £250,000 but let the lease go down to 47 years.The surveyor aid I should pay 35k to extend but the greedy freeholder wants 69k. He won't budge and I don't have that amount. The next stage would have been to take that to a tribunal at my expense so I pulled out and got a 3k bill. I have a buyer at a greatly reduced price who is happy to have it with the short leas. There are several people in the block trying to extend but have all had to give up as the freeholder won't reply to mail and won't come down in price. His aim is to buy the flats if people are forced to sell then he sells the flat on with a 99 year lease and a fat profit. A nasty piece of work!

buglawton

So, your solicitor served statutory notice to extend and the freeholder served a counter notice? Since your right to extend is protected by law, it would then go to tribunal if freeholder will not agree and to a fair cost. Did it go to tribunal and what was the result?

ognum

libellule69 wrote: »

I have a flat worth £250,000 but let the lease go down to 47 years.The surveyor aid I should pay 35k to extend but the greedy freeholder wants 69k. He won't budge and I don't have that amount. The next stage would have been to take that to a tribunal at my expense so I pulled out and got a 3k bill. I have a buyer at a greatly reduced price who is happy to have it with the short leas. There are several people in the block trying to extend but have all had to give up as the freeholder won't reply to mail and won't come down in price. His aim is to buy the flats if people are forced to sell then he sells the flat on with a 99 year lease and a fat profit. A nasty piece of work!

Hmm, interesting comments here. It is your resposibility to insure your lease does not fall to this level. My guess is the freeholder is simply cashing in on an assett!

buglawton

Most leaseholders never think about the issue and never put money aside for a lease extension in advance. There are always other priorities. This is why so very many poor lease flats come up for sale (with the EA carefully avoiding mention of the remaining lease term in the listing). Seller asks for a handsome price and guess what, it remains on the market forever as buyer after buyer discovers the facts and runs a mile.