Extend Your Lease guide discussion

Tom99

Deleted_User wrote: »

I am posting for some advice as leasehold properties are a new thing to me, we have only ever owned freehold previously.

My mother is moving soon, and on getting an offer on her property (which is too big for her) she's found a cheap leasehold property with a 59 year lease. She's rather fallen in love with it and as its cheap she can afford to renew the lease and then redecorate the place as well, and still have a little bit left over.

She have been quoted £33k to renew the lease (we have yet to ask how long this extension is). Is this a good price?

I have read that once she owns the property, am I correct to assume she can go ahead and start the lease extension paperwork? Even if she hasnt lived there for two years?

Also, who would she contact in the first instance to get the ball rolling? Solicitor, or LA? Or someone else?

Try one of the online calculators to get a feel for the premium she would have to pay, such as this one:
https://www.freeholdcalculator.com/leasehold_extension.php
In order to use the statutory lease extension process straight away the seller needs to have owned the property for two years and will need to agree to serve a section 42 notice on their own behalf before completion takes place. That notice is then assigned to your mother to complete and pay for the process.
Your mother should appoint an RICS surveyor to act for her in producing a valuation for the lease extension which can be used in the notice. Her solicitor should prepare the notice and ensure it is correctly served by the seller as any mistake and she will have to wait 2yrs.
The £33k quoted will be for what is called an informal lease extension which may well be for a shorter term than the +90yrs a statutory extension will give and probably will also retain and maybe even increase the ground rent.

suestew

Hi, some advice needed. Selling my flat which currently has 91 years left on the lease. EA advised to extend this which I ignored as I felt I wouldn't benefit from it financially but solicitor also advised it.

Should I email the freeholder and ask how much he would charge, is that the best way to start negotiations?

eddddy

suestew wrote: »

Should I email the freeholder and ask how much he would charge, is that the best way to start negotiations?

That would be the informal route to a lease extension.

The other route is a statutory lease extension.

With the informal route, the freeholder can ask any price and any terms they want - they might ask for silly money and silly terms. (It's best to take professional advice before agreeing.)

Some info: https://www.lease-advice.org/article/lease-extension-of-leasehold-flats-the-two-routes/

But I'm not convinced that you need a lease extension with 91 years left on the lease.

suestew

eddddy wrote: »

That would be the informal route to a lease extension.

The other route is a statutory lease extension.

With the informal route, the freeholder can ask any price and any terms they want - they might ask for silly money and silly terms. (It's best to take professional advice before agreeing.)

Some info: https://www.lease-advice.org/article/lease-extension-of-leasehold-flats-the-two-routes/

But I'm not convinced that you need a lease extension with 91 years left on the lease.

Thank you.

I tend to agree about not needing an extension, I think 91 years is good and that people start to want it extended around the 80 year mark. I do get that who ever buys it now may realise that if they sell in say 7-8 years time they will be faced with this, it might put buyers off and that is the reason both EA and solicitor are advising it. Well the EA just wants it sold so they benefit greatly from me paying out thousands

eddddy

suestew wrote: »

Thank you.

I tend to agree about not needing an extension, I think 91 years is good and that people start to want it extended around the 80 year mark. I do get that who ever buys it now may realise that if they sell in say 7-8 years time they will be faced with this, it might put buyers off and that is the reason both EA and solicitor are advising it. Well the EA just wants it sold so they benefit greatly from me paying out thousands

Realistically, some buyers will prefer an unextended lease, others will prefer an extended lease.

• With an unextended lease, the flat will be cheaper - and the buyer has maybe 5+ years to save up the cost of an extension.

• With an extended lease, the flat will be more expensive (so out of some buyers' price range) - but it saves the hassle of a lease extension in future

TBH, I'd think there'd be more interest in a cheaper flat with an unextended 91 year lease - and EAs I've spoken to generally agree.

However, if you can get a reasonable offer from the freeholder, you can pass on the details to prospective buyers.

specialhat

Hello! Quick question.

I am doing a formal lease extension and both parties have agreed a premium (I just accepted his counter offer as it was quite reasonable). We triggered the "timetable for completion" on 28th June. However, his solicitor has been very discourteous and slow throughout.

We have two months from 28th June to provide a contract and transfer, and we both have to agree the terms of the new lease. My solicitor even drafted a lease to make it easy. However, more than three weeks have passed and the freeholder's solicitor has not responded to my solicitor at all. My solicitor is quite concerned.

What's in it for him to delay/not complete in time? If we do have to take this to a tribunal (which is baffling as we have agreed a premium and they previously said they accepted all the terms), could that take several more months and cost both me and the freeholder money? Any advice would be appreciated please.

Tom99

specialhat wrote: »

Hello! Quick question.

I am doing a formal lease extension and both parties have agreed a premium (I just accepted his counter offer as it was quite reasonable). We triggered the "timetable for completion" on 28th June. However, his solicitor has been very discourteous and slow throughout.

We have two months from 28th June to provide a contract and transfer, and we both have to agree the terms of the new lease. My solicitor even drafted a lease to make it easy. However, more than three weeks have passed and the freeholder's solicitor has not responded to my solicitor at all. My solicitor is quite concerned.

What's in it for him to delay/not complete in time? If we do have to take this to a tribunal (which is baffling as we have agreed a premium and they previously said they accepted all the terms), could that take several more months and cost both me and the freeholder money? Any advice would be appreciated please.

The terms of the extended lease are exactly the same as the existing lease so a very short document which varies the expiry date and the ground rent is all that's require. There may be a few other standard clauses but in all not more than 5 pages in all I would think.

specialhat

Tom99 wrote: »

The terms of the extended lease are exactly the same as the existing lease so a very short document which varies the expiry date and the ground rent is all that's require. There may be a few other standard clauses but in all not more than 5 pages in all I would think.

Plus he'd already explicitly agreed to all the standard terms in his counter offer! I just don't understand that delay.

specialhat

Update: my solicitor finally got hold of the freeholder's solicitor. I think he's just really disorganised. We now have a draft lease so things are moving along.

cheunw

Hi. I have a flat which is of 'non standard construction' (made from prefabricated concrete slabs). It has 92 years left on the lease. I'm aware that due to the construction method it will be difficult to get a mortgage for this and a 'cash buyer' will be needed should I ever wish to sell. My question is, is it worth extending the lease?