Extend Your Lease guide discussion

ForzaFifer

Or is that a bit like, how long is a piece of string?

I agreed to buy a flat back in December on the agreement that the seller renews the lease, which they agreed to. The estate agent told me its all in motion, but it seems to be taking ages. So, can anybody tell me how long it took them to renew theirs?

cheers,

da_rule

ForzaFifer wrote: »

Or is that a bit like, how long is a piece of string?

I agreed to buy a flat back in December on the agreement that the seller renews the lease, which they agreed to. The estate agent told me its all in motion, but it seems to be taking ages. So, can anybody tell me how long it took them to renew theirs?

cheers,

It can take up to a year, sometimes longer. It depends entirely if all the parties co-operate or if the Tribunal becomes involved etc (assuming your seller is going for the statutory option).

If your seller is going for the statutory option, you don’t have to wait for it to complete. The seller can assign the process to you and you can finish it off.

ForzaFifer

da_rule wrote: »

It can take up to a year, sometimes longer. It depends entirely if all the parties co-operate or if the Tribunal becomes involved etc (assuming your seller is going for the statutory option).

If your seller is going for the statutory option, you don’t have to wait for it to complete. The seller can assign the process to you and you can finish it off.

A year? Thats crazy... I think he had already agreed the cost of the extension, so i just thought it would be done pretty quickly.

Thats interesting, i didnt know about the statutory option. How does that work though? I would just move in whilst the seller pays for the extension? Sounds a bit dodgy.

eddddy

ForzaFifer wrote: »

A year? Thats crazy... I think he had already agreed the cost of the extension, so i just thought it would be done pretty quickly.

So that sounds like an informal lease extension.

So, in theory, that could be done instantly - it's just signing documents. (Just like, in theory, a house purchase can be done instantly - just by signing documents.)


But in reality, the process might be more like this:

• The freeholder, the current leaseholder and you agree terms of the lease extension

• The freeholder's solicitor draws up a lease extension deed

• The leaseholder's solicitor, your solicitor and you all check the deed

• If there are no problems, you all agree to sign and exchange

It's often agreeing the terms (e.g. arguing about the price) that takes the longest.

ForzaFifer wrote: »

Thats interesting, i didnt know about the statutory option. How does that work though? I would just move in whilst the seller pays for the extension?

Almost certainly not.

You would have to estimate what the lease extension will cost, and reduce your offer price accordingly.

You would then pay for the lease extension yourself.

So if you are buying with a mortgage...

• The flat has to be mortgageable with its current lease length

• You will probably need enough cash (not mortgage borrowing) to pay for the lease extension

ForzaFifer

Almost certainly not.

You would have to estimate what the lease extension will cost, and reduce your offer price accordingly.

You would then pay for the lease extension yourself.

So if you are buying with a mortgage...
The flat has to be mortgageable with its current lease length
You will probably need enough cash (not mortgage borrowing) to pay for the lease extension

Ok, i get it now. That wasnt really an option as the lease was down to 60 years, i agreed to buy it on the provision he extended the lease back to 125 years.

I'll just have to wait i suppose, and maybe get in touch with the estate agent again.

Cheers,

batg

ForzaFifer wrote: »

Or is that a bit like, how long is a piece of string?

I agreed to buy a flat back in December on the agreement that the seller renews the lease, which they agreed to. The estate agent told me its all in motion, but it seems to be taking ages. So, can anybody tell me how long it took them to renew theirs?

cheers,

I am in the same situation, it's been going on since October.

eddddy

ForzaFifer wrote: »

Ok, i get it now. That wasnt really an option as the lease was down to 60 years, i agreed to buy it on the provision he extended the lease back to 125 years.

I'll just have to wait i suppose, and maybe get in touch with the estate agent again.

Cheers,

Don't forget to check whether the ground rent will change - especially if it's an upward change.

Some sneaky freeholders try to slip nasty ground rent terms into informal lease extensions.

(Also find out if the freeholder is trying to change any other terms of the lease at the same time.)

eddddy

batg wrote: »

I am in the same situation, it's been going on since October.

Depending on the exact circumstances, it can sometimes turn turn into a prolonged game of chicken - see who blinks first!

• The freeholder knows the leaseholder needs a lease extension in order to sell the property...

• ... so the freeholder asks for a 'stupidly-high' price for the lease extension.

• The leaseholder says they won't pay that much. So unless the price comes down, they won't sell the flat, so they won't extend the lease, and so the freeholder won't get anything

And it's a case of who gives in first!

batg

eddddy wrote: »

Depending on the exact circumstances, it can sometimes turn turn into a prolonged game of chicken - see who blinks first!

• The freeholder knows the leaseholder needs a lease extension in order to sell the property...

• ... so the freeholder asks for a 'stupidly-high' price for the lease extension.

• The leaseholder says they won't pay that much. So unless the price comes down, they won't sell the flat, so they won't extend the lease, and so the freeholder won't get anything

And it's a case of who gives in first!

mine hasn't been like that at all.
the freeholder said £750 and his legal fees so about £1250 and the people I am buying off have paid.
Ground rent is £20 per year and that is staying the same.

The hold-ups have been between the seller's solicitor, the freeholder's solicitor, the freeholder's mortgage company (whoever it was who took on Northern Rock), our solicitor etc...how they haven't moved into this century and stopped using snail mail I have no idea!

strawberries1

I've applied to the FTT. I'll appreciate suggestions re contesting the legal fees and the premium.

strawberries1 wrote: »

I went with the fixed fee.

The freeholder had proposed £18,867 (counter notice) as opposed to my £12,000 (S.42). After I presented him my surveyors calculations he's reduced it to £16,000.

I've asked how much it will be if he retained some ground rent and he's offered £15,700 for retaining £30 GR.

He says he'll reduce the premium by £1000- for every £100 in GR ie £15,000 for £100gr increasing by £100 every 25yrs.

£14000 if £200 increasing by £100 every 25yrs

£13,000 if £300 increasing by £100 every 25yrs.

72yrs remaining, bought at £260,000 in July 2018 £30 GR.

In 2013 a similar flat with 78yrs left paid £6000 to extend with GR at £250 doubling every 25yrs.

Is this fair enough or shall I get my surveyor to negotiate further?

Counter notice is dated 7th September. I have 6 months from that date to agree the premium right?