Extend Your Lease guide discussion

bowler201082

Hi all,

My first post here so please be gentle!

I am wanting to begin the process of extending my 79 year lease, if I'm honest it frightens the life out of me as it's unknown territory. Does anyone have any template letters especially the first one to write to my landlord informing that I wish to extend my lease voluntary?

Your help really is greatly appreciated!!!

CClark_2

Hi,
I currently own a 50/50 share of a home ownership flat and the lease is now down to 71 years. The housing association will not allow me to extend the lease as l do not own the flat out right but as l do not earn enough to apply for a full mortgage for the other half of the flat l am stuck. Has anyone else been in this situation or can advise me on legally challenging this?

hencloud_2

Hi

You can approach your freeholder but it really depends on who it is. If you are friendly with them then you might be able to negotiate something informally. Let me know the Freeholder.

Simon Brook
South East Leasehold
Solicitors & Chartered Surveyors

hencloud_2

briddj wrote: »

I'm currently going through the process of extending my lease.

The leaseholder has demanded a figure vastly higher than the valuation (no surprise there) so we have to enter negotiations.

The valuer is quoting either £200/hour or a flat fee of £1,500 no matter how long it takes. Am I better taking the flat fee or is the cost unlikely to get that high?

Thanks.

Where is the flat?

I would not pay an hourly rate.

£1,500 is high for a valuation unless its in the middle of London.

unij1

Hi All,

I am just starting the process and it is very hard to tell the difference between a good Solicitor and surveyor and a bad one. Does anyone care to offer a recommendation for who to hold hands with in this process? Preferably someone who is quick to reply and you didn't have any problems with!
Thanks in advance!

J

jamels2

J
I have the same question how to find a good solicitor who doesnt take days to reply to an email?
Thanks

Squirrel60

Hello,

I'm trying to help some friends (haha no it's not me!) with what I consider to be quite a dire situation, and I'd appreciate it if someone could skim it and see if how I view it is correct or if there are any silver linings.

They are a married couple about to retire on state pension with a little bit of extra private pension. They have ~£80k left on a now interest only mortgage with only 8 years remaining, I have seen that some lenders are now allowing mortgages to be repaid in retirement to 85 or beyond so I had suggested they remortgage to stretch it out (with help from family to repay in ~18 years instead of 8) and allow them to stay in their home.

The thorn I have just discovered is their house (yes a semi-detached house not a flat) is actually leasehold, and with less than 60 years left on the lease (believe they had it from new with a 99 year lease), digging round the net it would seem to be about £28k to extend the lease - whether it's different for houses to flats I don't know, as leasehold houses seem much less common.

Putting aside that what a mortgage lender would actually be prepared to lend them is probably a lot less than what they need, could they in principle add the cost of a lease extension (or freehold purchase) to their remortgage? This would mean they would need to borrow £80k + £28k = £108k for 18 years on a little over 2 state pensions - which I doubt would happen, but that's something else.

They recently had the house valued at just over £200k, for the purpose of getting an idea of current LTV% for remortgages (so it's at less than 40%) - but I believe that probably did not take into account the reduced lease although estate agent mentioned it *might* cause an issue for mortgages (assuming it being sold now, not further down the line when it's even less and even more of a problem). Is it a rule of thumb that the years left on a lease give you a % value of the property i.e. 58 years means it's actually work 58% of £200k? Seems low if "only" £28 to extend lease.

So there are 2 ticking time bombs as I see it:

1) The mortgage term ending in 8 years with £80k debt left - which might have been resolved with a "mortgage in retirement" plan...but....the impact of it being leasehold.

2) The lease already down to 58 years - thus this makes remortgaging, or selling it a problem if they want to downsize now to clear the mortgage (but when you consider they will have £200k sale - £80k oustanding mortgage - £28k lease extension to make it "sellable" it leaves them with £92k which doesn't get much these days - I suppose they could get a smaller mortgage on top.

What happens if the mortgage expires and it's not repaid, yet the house has only 50 years lease? Would the mortgage company also reclaim the cost of lease extension from the proceeds of sale anyway?

I only just found out about it being leasehold so I'm trying to help them find a way forward, my house is freehold so I didn't really know anything about how this works until now.

Thanks,

Ed

silkz

My lease is short at 66 yrs. Trying to sell my flat and I thought I had extended it after purchase following and agreement with the previous freeholder as it was an inherited condition by ex-seller who payed it on me as a naive ftb. Now I found out it wasn't for an extension but a transfer of lease? How can i sell my flat with this looming as my buyers mortgage company won't lend on a short term.

I can't approach the existing freeholders as we're in dispute with them about maintenance issues and they're evil money grabbing snakes who have put a spanner in the works with the property forms for the sale, hiking up their fees to £750 and adding calculated interest etc to stuff and their time for 'meetings'. I'm at a loss at what to do as they've been edging us out slowly for the past 10 years being landlords from hell and never lifting a finger for the money we have paid them monthly. They've never issued us letters regarding the works or followed lease processes so in breach for sure. It's caused no end of stress, with 2 young kids, we just want to get out of here. My husbands saying we should've paid them what we 'owed' 2 yrs ago to avoid this drama.

Helen_havers

Good Evening,

I am looking to purchase a flat in a block of 15. It is a Victorian block. Lease needs extending, preferably as part of the purchase in that S42 notice is served on the freeholder. Vendor is NOT keen to engage in this idea. Notwithstanding that I have no idea how to determine the price to offer because of some clauses in the lease. I repeat them here and would welcome some thoughts on how to Price the marriage value:
"At any time or time after the expiration of the first twenty five years of the said term the Landlord may by written notice to the tenant require that the rent hereby reserved shall be revised as hereinafter mentioned provided that no such notice shall be served within the period of 25 years after service of a previous notice under this sub clause...
(D) and revised rent shall be a ground rent in the sense that it shall represent one-fifth of the letting value of the whole site of the building and the ground occupied and enjoyed there with for the use for which it is lawfully used at the time the revised rent is fixed and regard being had to the provisions of this lease so far as then applicable and relevant ...
(E) an agreement between the landlord and the tenant as to the amount of any revised rent shall be in writing and signed by both parties and each party shall if so required procure if possible that a memorandum of such agreement is endorsed on or annexed to the Lease and counterpart "

Thank you very much.

eddddy

Helen_havers wrote: »

Good Evening,

I am looking to purchase a flat in a block of 15. It is a Victorian block. Lease needs extending, preferably as part of the purchase in that S42 notice is served on the freeholder. Vendor is NOT keen to engage in this idea. Notwithstanding that I have no idea how to determine the price to offer because of some clauses in the lease. I repeat them here and would welcome some thoughts on how to Price the marriage value:
"At any time or time after the expiration of the first twenty five years of the said term the Landlord may by written notice to the tenant require that the rent hereby reserved shall be revised as hereinafter mentioned provided that no such notice shall be served within the period of 25 years after service of a previous notice under this sub clause...
(D) and revised rent shall be a ground rent in the sense that it shall represent one-fifth of the letting value of the whole site of the building and the ground occupied and enjoyed there with for the use for which it is lawfully used at the time the revised rent is fixed and regard being had to the provisions of this lease so far as then applicable and relevant ...
(E) an agreement between the landlord and the tenant as to the amount of any revised rent shall be in writing and signed by both parties and each party shall if so required procure if possible that a memorandum of such agreement is endorsed on or annexed to the Lease and counterpart "

Thank you very much.

Its probably best to instruct a Lease Extension Valuer to calculate the premium for for the s42 notice. And don't forget to budget for up to £4k in fees on top.

It typically takes between 6 and 12 months for a Statutory Lease Extension to be completed. So I guess you're asking the seller to serve the initial s42 notice, and you will complete the lease extension process after you've bought the flat.