Extend Your Lease guide discussion

ChrisC360

Hi all,

I often read through these forums for useful advice and have decided it's about time to register and see if anyone can help me out!

I currently own a leasehold flat in a block. I purchased the flat at the end of 2006 - it was originally on the market for 135k, reduced to 130k by the seller for a quicker sale and I paid 125k. A year later an identical flat in the same block sold for 130k.

The lease on my flat has 61 of the original 99 years remaining and so I am looking to extend this as I want to put the flat on the market this year.

Having looked around on the internet I understand that legally I can add 90 years to the remaining term - giving me 160 years. Using the calculator on this site, I would guess I would be looking at around 14-16k to do this, plus fee's.

I decided to contact the managing agent direct to query the lease extension, they have replied and offered me the following:

A deed of variation - extending the lease back up to 99 years at a cost of £8750 plus £475 in fee's.

An increase in the ground rent to £250 per year doubling at 25year intervals (it is currently £80).

I was wondering if this seems like a decent offer - obviously by doing it this way I would save some of the costs associated with using a leasehold extension company and just have mine and the landlords solicitors fee's to pay.

Any comments would be appreciated!

Many Thanks,

Chris.

richardw

ChrisC360 have others in the block extended their lease?

ChrisC360

Richard - I don't know, there are 2 blocks and around 40 flats in total, most are buy to let's and so the tenants change often, I have no idea who the individual landlords would be!

richardw

ChrisC360 wrote: »

An increase in the ground rent to £250 per year doubling at 25year intervals (it is currently £80).

I was wondering if this seems like a decent offer

Well that doesn't appear to be that 'decent'.

SKPatel

ChrisC360 wrote: »

Hi all,

I often read through these forums for useful advice and have decided it's about time to register and see if anyone can help me out!

I currently own a leasehold flat in a block. I purchased the flat at the end of 2006 - it was originally on the market for 135k, reduced to 130k by the seller for a quicker sale and I paid 125k. A year later an identical flat in the same block sold for 130k.

The lease on my flat has 61 of the original 99 years remaining and so I am looking to extend this as I want to put the flat on the market this year.

Having looked around on the internet I understand that legally I can add 90 years to the remaining term - giving me 160 years. Using the calculator on this site, I would guess I would be looking at around 14-16k to do this, plus fee's.

I decided to contact the managing agent direct to query the lease extension, they have replied and offered me the following:

A deed of variation - extending the lease back up to 99 years at a cost of £8750 plus £475 in fee's.

An increase in the ground rent to £250 per year doubling at 25year intervals (it is currently £80).

I was wondering if this seems like a decent offer - obviously by doing it this way I would save some of the costs associated with using a leasehold extension company and just have mine and the landlords solicitors fee's to pay.

Any comments would be appreciated!

Many Thanks,

Chris.

Hi Chris,

I think you need to speak to a surveyor to know if you have a good deal here if you're unsure. The fees seem reasonable enough and if a surveyor thinks you have a reasonable offer then its wise to proceed.

Alternatively, you can always serve a statutory notice on the landlord for a lease extension although the costs associated with this route will be higher and the process longer - which may not be ideal if you're looking to sell the flat.

Bowski83

ChrisC360 wrote: »

Hi all,

I often read through these forums for useful advice and have decided it's about time to register and see if anyone can help me out!

I currently own a leasehold flat in a block. I purchased the flat at the end of 2006 - it was originally on the market for 135k, reduced to 130k by the seller for a quicker sale and I paid 125k. A year later an identical flat in the same block sold for 130k.

The lease on my flat has 61 of the original 99 years remaining and so I am looking to extend this as I want to put the flat on the market this year.

Having looked around on the internet I understand that legally I can add 90 years to the remaining term - giving me 160 years. Using the calculator on this site, I would guess I would be looking at around 14-16k to do this, plus fee's.

I decided to contact the managing agent direct to query the lease extension, they have replied and offered me the following:

A deed of variation - extending the lease back up to 99 years at a cost of £8750 plus £475 in fee's.

An increase in the ground rent to £250 per year doubling at 25year intervals (it is currently £80).

I was wondering if this seems like a decent offer - obviously by doing it this way I would save some of the costs associated with using a leasehold extension company and just have mine and the landlords solicitors fee's to pay.

Any comments would be appreciated!

Many Thanks,

Chris.

Hi Chris

I'm in exactly the same postion - 61 years remaining on lease and today the freeholder said they will extend the lease back to 99 year for £6.5k + £950 fees - this seems very expensive especially when market value of property is only approx £60k.

My thoughts are now to get a survey on the property so I can begin negotiations but its quite a scary process. :eek:

richardw

Bowski83 wrote: »

..61 years remaining on lease and today the freeholder said they will extend the lease back to 99 year for £6.5k + £950 fees - ...

The MSE guide talks about adding 90 years to the existing lease, your freeholder seems to be only proposing to add 19 years above an 80 year minimum, doesn't appear to be much of an extension.

Bowski83

richardw wrote: »

The MSE guide talks about adding 90 years to the existing lease, your freeholder seems to be only proposing to add 19 years above an 80 year minimum, doesn't appear to be much of an extension.

I agree - I would be happy with a shorter extension if the price was right - but at 7.4k inc fees the price is def not right.

SKPatel

Bowski83 wrote: »

I agree - I would be happy with a shorter extension if the price was right - but at 7.4k inc fees the price is def not right.

At the moment, you appear to be negotiating 'informally' with the freeholder and it is not unusual for him to offer you a 99 year lease for a revised ground rent. Most freeholders who own freeholds as investment like to retain some income. Remember that any terms are open for negotiation so feel free to request a longer/shorter term if the price is right.

The 90 year rule applies if you seek a lease extension under the law i.e. a 'formal' or statutory approach. By this you will be serving a notice on the freeholder requesting a lease extension for 90 years on top of what currently remains and asking for your ground rent to be reduced to zero. This is your entitlement under the legislation - something to remember if informal negotiations prove futile.

spendaddict

After reading these posts I have sent a request direct to the freeholder keeping my fingers crossed they will come back with a decent offer.

One question I hope someone can help me with, when contacting about the extention it appears that the company has merged with another company. I know that if the freeholder sells the freehold the first refusal must go to the leasee, is this the same with a merger? If not, should I at least have been informed?

Thanks