Extend Your Lease guide discussion

buglawton

The freeholder knows blanks2015 could demand to extend your lease by up to another 90 years, not another 25 as blanka2015 seems to have been offered. He's hoping you'll accept 25.

Meanwhile it's recommended that if you go to all the bother of an extension, go for a minimum of 125 years.
http://www.leaseextension-uk.info/lease-extension-calculator.html

starving_artist

Blanka2015 wrote: »

Dear all,

I am looking for an advice... I am looking to extend the lease on my flat (currently it's 74 years). I have approached the freeholder directly and so far paid around £200 for their valuation. The freeholder then sent me a letter, offering a FREE lease extension to 99 years. They've only stated that I would be responsible for covering their solicitor fees for drawing new contracts and increased my ground rent from £75/year to £300/year.

Have any of you had similar experience? The offer is genuine - I called the freeholder just in order to confirm; however, this seems like "too good to be true" as I was expecting the cost over £10,000 given the fact the length of the lease is now below 80 years...

What's the catch? Can you please help?

Thank you very much in advance.

Would it be possible to accept the offer of a 'free' lease extension and then a apply for the statutory 99 year extension before the lease dips below 80 years thereby reducing the ground rent to peppercorn and avoiding the costly marriage value element of the calculation?

blueblazer

I have my flat on the market. It currently has 86 years left on the lease. I have received an offer after a week for the full asking price £150k on the basis that the lease is extended on completion. I've tried to get information from the management company but they aren't being particularly helpful - all they have said is they would extend for 90 more years, the cost of the last extension in the block was £20,500 and send them a cheque for £240 if you want a quote. Obviously I don't want to pay if it is going to be a huge amount, especially as there is still 86 years. Has anyone been in this situation or have any advice? Should the management company give me a more accurate quote without paying or can I work it out myself? The calculator says £3-£4k but am a bit worried by the figure quoted by them.
Thanks in advance

jdslater

Quick question,

I've got 64 years left on my lease. The landlord and lease holder actually lives below me (converted house and we are top floor).

We need to extend the lease so I have a few questions.

1) the estimates we have looked at on various websites start from £8000 onwards. If we agree a lower price between ourselves do we still need a surveyor?

2) If we agree on a lower price would it be wiser to ask to bring up the lease back up to 99 years or do we ask for another 99 years?

3)we would obviously pay both of our legal fees. Whats the average price for the costs of these?

4) If there are no problems (haha I know) whats the average time that all the paperwork to go through?

Thanks all.

techno12

I've (almost) just gone through the process...posted the signed docs and paid the balance today so it ought to complete this week.

My flat has 62/61 years left (I kicked off the process a week before the year ticked down to 61). I've been here for 9 years and knew this was a hot potato, and it's been playing on my mind for a couple of years so decided to extend.

I'm in a victorian house, split into 10 flats. I paid £160k back in 2006 - the online calculators quoted anything between £14k and £20k to renew - depending on the valuation.

I emailed the managing agent and she said "use an online calculator, you'll need to get a valuation etc". I didn't want to be so formal so made a slightly low-end £13k offer, which was accepted, though the terms were never made clear other than 'extra 90 years'

I had no solicitor so emailed 3 and chose the first one to reply.

Took 14 weeks. The big delay was waiting for the freeholder's solicitor to 'draft' the lease. Nothing for over 10 weeks, no contact from my solicitor other than "I'll ask him again" replies to my emails. Very frustrating! (maybe solicitors are like this and never reply to emails in detail or keep the customer informed).

Legal costs were around £1k (for both sides - freeholder's slow solicitor charged £550, my non-communicative and non-proactive once was £400). Pretty reasonable I think..

I never received clarification on the terms of the extension during the process, ie what would the ground rent be? would it become peppercorn? would it go up? etc. Solicitors on both ends silent.

What eventually emerged was +99yrs and ground rent as it is (£60pa, doubling in 30 yrs time and an amendment was for it to remain at that level beyond that).

Was hoping for peppercorn, but not too bad I guess. I'm just so relieved to have finally extended to a decent level and thus I can sell more easily - I'd put it off for too long!. I guess I could have gone through the formal process, but I reckon it would have cost a fair bit more and taken even longer so I went down the 'informal offer' route.

EDIT: Still haven't completed. 3 weeks after the due date my solicitor has refused to answer any of my emails. Finally got a reply last night - the usual "I will chase him". Surely my solicitor ought to be busting a gut to finalise the completion, but it looks like since I've paid them, and transferred the extension fee, they're no longer interested.

zoemon

I've just put my flat on the market and just had my 1st viewing cancelled because the viewer noticed the remaining lease term: 66 years. It wasn't until a 3rd estate agent valuation that someone mentioned the term "Lease" and until that time I've been completely naive and spent a small fortune doing up my flat over the last 5 years without a care in the world!
I've stumbled across this thread and am now starting to panic.
I need to make as much money out of my flat as possible to be able to have a 10% deposit to buy a house and all I can now see is a much reduced selling price, or spending an absolute fortune to extend the lease, both of which is really quite an upsetting thought.
I had absolutely no idea about buying leasehold back in 2010 when I bought this flat, with a lease of 71 years remaining. No one highlighted this to me as a (now pretty serious) issue.
I've dug out my paperwork from my purchase and found 4 pages of 'Lease Information' in which there is a paragraph which states "Although it is possible to extend the term of a Lease subject to meeting certain qualifications, the procedures for doing so are complex and can be prohibitively expensive"

Personally, I don't think this is good enough to highlight the potential serious issue and should have been highlighted explicitly to me, but hey, I've signed to say I'd read all the information and so dont have a leg to stand on.

Anyway, what on earth should my next move be? Flat is on the market already, I've paid for 6 months advertising up front with Tepilo estate agent, and I want to be able to sell it within this period so I don't have to pay further fees. Do I just sit and wait it out, will there be a buyer out there, has anyone recently sold their leasehold without having to extend? Or am I going to have to start the ball rolling in regards to extending bearing in mind I don't have the spare cash to do this, nor the equity in my mortgage to pay for it.

End_Of_Tether_3

Hi all,

Bit desperate here (understatement) but will try to keep it short.

Great thread with lots of success stories but theres one question that I just cant get past...

Situation:

My brother owns a one bed first floor maisonette (self contained - own entrance - more like a flat).

He purchased with a decent lease somewhere up in the 90's but has very very very foolishly had his eye off the ball and now has only 79 years remaining.

He purchased outright therefore has no mortgage however after 15 years he can no longer afford to run the flat on his wages and after very much nagging from me he has finally come to his senses and needs to sell up ASAP.

The Freeholder is a very large housing association and I would have thought they would be the first port of call for help and advice but from what I've read they're actually the wolves rubbing their hands together waiting for you to mess up so they can cash in !

So heres the problem, I've done a lot of reading on this nightmare of a mess but always get to the point that requires you to "get your wallet out" and I want to know what one does when the wallet is empty ?

Surely there must be finance companies that specialise in this sector ?

I've had eight heart attacks and as a result my lovely little studio flat in Bournemouth was repossessed by the lender, I lost everything and only have the clothes I stand up in and yes, both the lenders solicitor and the district judge were smirking profusely (like old mates) whilst granting possession and also smugly refusing further time due to my having a serious and keen buyer lined up via an estate agent.

I dont want this to happen to my Brother, I wouldnt wish a repossession on my worst enemy, it seriously is very unpleasant.

Its a daily struggle to keep his head out of the sand and hes close to just "walking away" as we dont know which way to turn, we want out ASAP but have no savings to "up the lease".

Any ideas greatly appreciated so thanks in advance.

PS: Please keep flames to a minimum I'm a bit fragile and also, no need to tell him how stupid hes been hes had plenty of that from me !!!
And as for property ownership... NEVER EVER AGAIN

GTG

EOT, it seems odd that your brother can't afford to "run" the maisonette when he does not have a mortgage. How will he afford rented accommodation if he sells?!

Your brother can put the property on the market the way it is. If the buyer wants a 99 year lease or longer then the cost of this (including the legal and valuation fees) can be deducted from the proceeds of the sale. This will be done and paid to the various parties by his solicitor handling the sale.

First find a solicitor tell him what you want to do and he/she will guide with regard to a lease extension. Your brother could also sell the maisonette with a reduction in price to allow for the lease extension. In practice I doubt whether this ever happens as any sensible buyer would insist on the lease being extended by the vendor. If there were a problem with this then it would be discovered by the vendor and not after the buyer has bought.

staple28

Does anyone have any experience on buying the leasehold of their house rather than a flat? Thanks

agarnett

A lease on a house is not entirely unusual, although it always needs careful examination by an expert. Sadly most conveyancy solicitors are not experts in any kind of lease, let alone a lease on a house.

The first question is in trying to understand the motive for the freeholder retaining an interest in the freehold.

Is it because the lease grants them control the buildings insurance and therefore to be able to take a commission ? Or is it more complex than that ? Perhaps there is adjacent land or accessways which are not part of your demised property but are part of the original development which need some collective device to manage and maintain? Does the freeholder have any interest in the management company which collects service charge under the lease ?

Subsequent questions might be:
How much a year is the service charge currently? Does it include buildings insurance or is that charged separately?
How long is the lease and how many years are unexpired?
What is the annual ground rent and can it go up? (Annual Ground Rent is not Annual Service Charge).
Is there any other legal device affecting the title e.g. an estate rent charge ?

In this whole thread I have seen very little emphasis placed on what might be termed "bad" lease extensions.

By "bad", I would mean extensions that are too short or which vary the ground rent in some way upwards. Also extra (onerous) terms get added sometimes when leases are not actually extended but surrendered and replaced by longer leases. Who really knows the difference? These things can reduce the overall value of the lease in the medium to long term (usually for the next unsuspecting buyer!).

As the MSE article originally said, there are maybe 4M leasehold properties in the UK. Probably more than 3.9M of the leaseholders haven't really a clue what burdens they have bought orwhat they must do to protect their asset.

Extending the lease is far too simplistic an answer in most cases.

I think many leaseholders have learned fast by their experience of leasehold life and concluded that getting out again fast is a better answer, transferring the risk to some new unsuspecting leaseholder blood. This sometimes means a "going through the motions" type lease extension is purchased by the selling leaseholder which satisfies a request to make the lease longer but contains terms which are bad for the incoming leaseholder. There may even be some specialist property "developers" who develop nothing but snap up leases which are in the low 80s years to run without lease extensions for a negotiated discount, and turn them round deliberately as long leases but with unhighlighted cheap bad extensions to unsuspecting new blood.

The whole business cries out for complete reform - and that includes the operations of all the solicitors who involve themselves in it.