Extend Your Lease guide discussion

lulu650

Would be grateful for any help;

We have a flat with 66 years left on the lease and have written to the Freeholder asking for the terms of extension. Their valuer has written back asking for £990 to visit the flat and for compiling a valuation report in order for the Freeholder to get back to us with the terms of extending.

We already have the flat being marketed for sale and were hoping for a lease extension figure we could tell interested buyers that would be more precise than the calculation tables. This is a small 2 bed flat with at least two in the same block, in the same year, having been valued by the same surveyor. Surely £990 is excessive? I have phoned another valuer and their price was £200 cheaper and expect a more local firm would be cheaper still. They are all ALEP members.

Should we have arranged our own valuation first and then arranged for an s42 to be served? Or are we liable for £990 come what may?

da_rule

lulu650 wrote: »

Would be grateful for any help;

We have a flat with 66 years left on the lease and have written to the Freeholder asking for the terms of extension. Their valuer has written back asking for £990 to visit the flat and for compiling a valuation report in order for the Freeholder to get back to us with the terms of extending.

We already have the flat being marketed for sale and were hoping for a lease extension figure we could tell interested buyers that would be more precise than the calculation tables. This is a small 2 bed flat with at least two in the same block, in the same year, having been valued by the same surveyor. Surely £990 is excessive? I have phoned another valuer and their price was £200 cheaper and expect a more local firm would be cheaper still. They are all ALEP members.

Should we have arranged our own valuation first and then arranged for an s42 to be served? Or are we liable for £990 come what may?

Did you serve a s42 notice without obtaining a valuation yourself? If so, how did you decide how much to offer in terms of the premium?

If you have served a s42 notice then you are liable for the freeholders reasonable costs. Reasonable doesn’t mean cheapest, so therefore if they can justify a more expensive surveyor (closer to them so easier to deal with, more detailed report, more years experience) then you’ll have to bear the costs.

As you’ve dropped below 80 years on the lease, and assuming you’ve gone down the statutory route, there is also the marriage value to calculate which may also account for part of the additional cost.

You can always withdraw your notice (you’ll still be liable for any of the freeholders costs incurred up until that point) however you won’t be able to serve a new one for a year.

If you haven’t served a s42 notice then you can just ignore the freeholder, get your own valuation and then serve a s42 notice.

lulu650

Thanks for your reply da_rule. We haven't served an s42, I didn't make that clear in my post.

Looks like we should find our own valuer first and take as much advice from him before engaging a solicitor.

Once a figure has been agreed with the Freeholder, how long is that held for? I thought it was for two months, but our estate agent seemed to think it would be for longer.

da_rule

lulu650 wrote: »

Thanks for your reply da_rule. We haven't served an s42, I didn't make that clear in my post.

Looks like we should find our own valuer first and take as much advice from him before engaging a solicitor.

Once a figure has been agreed with the Freeholder, how long is that held for? I thought it was for two months, but our estate agent seemed to think it would be for longer.

There’s no real limit on how long it is held for once it’s agreed, it’s held until the lease is finalised or the notice is withdrawn. There are time limits throughout the process that need to be adhered to.

MiMi86_2

I’ve been contacted by a local solicitor firm, offering to act on my behalf to extend my lease, which is currently at 86 years. The firm has also contacted other owners in my block and reported that many are interested in moving forward, so they’re looking to arrange a group valuation date. Is there any benefit to me of going with this solicitor, if others in my block do as well? Thanks.

da_rule

MiMi86 wrote: »

I’ve been contacted by a local solicitor firm, offering to act on my behalf to extend my lease, which is currently at 86 years. The firm has also contacted other owners in my block and reported that many are interested in moving forward, so they’re looking to arrange a group valuation date. Is there any benefit to me of going with this solicitor, if others in my block do as well? Thanks.

The only advantage may be that they will be a bit cheaper on the basis that they’re getting a lot of work out of it. The only way you’d be able to quantify this though would be to get quotes from other firms.

Tom99

MiMi86 wrote: »

I’ve been contacted by a local solicitor firm, offering to act on my behalf to extend my lease, which is currently at 86 years. The firm has also contacted other owners in my block and reported that many are interested in moving forward, so they’re looking to arrange a group valuation date. Is there any benefit to me of going with this solicitor, if others in my block do as well? Thanks.

It's the surveyor who will act for you in helping to get the lease extension at the lowest possible price I would be more worried about.
Who is arranging the 'group valuation'? Are they proposing an informal lease extension process? Solicitors are not expert in valuation you would normally appoint a chartered surveyor to deal with valuation/negotiation etc.
Unless this group of interested leaseholders are looking to buy the freehold or apply for a right to manage there is probably very little benefit in tying together several individual lease extensions. You could well get bogged down in all the other tenant's problems.

Badoudn

I am in the process of going down the formal route for a lease extension - I now have 60 years left on my lease on a flat bought in 1998.

I am looking for advice on a couple of questions;

1) I was wondering if, back when I bought my flat or the subsequent 2 times I remortgaged, my solicitor should have warned me that my lease was at 80 years or lower and whether there is any legal action I could take against them?
2) Can the costs associated with the lease extension be paid out of the sale of the property e.g. agreed with the buyer and freeholder to complete and extend the lease on the same day?

da_rule

Badoudn wrote: »

I am in the process of going down the formal route for a lease extension - I now have 60 years left on my lease on a flat bought in 1998.

I am looking for advice on a couple of questions;

1) I was wondering if, back when I bought my flat or the subsequent 2 times I remortgaged, my solicitor should have warned me that my lease was at 80 years or lower and whether there is any legal action I could take against them?
2) Can the costs associated with the lease extension be paid out of the sale of the property e.g. agreed with the buyer and freeholder to complete and extend the lease on the same day?

Did you purchase it with 80 or 81 years remaining?

Either way, did the solicitor not make you aware at all of the term remaining? If they did, did you ask for advice on what this means?

As for remortgaging, again, unless you asked then I can’t see why they would go out of their way to advise you on this. They would believe that, as you accepted the assignment of the lease, you were aware of the terms contained within it.

In relation to completion, yes you can arrange for simultaneous conpletion of the extension and then an assignment and pass the appropriate sale monies onto the freeholder.

eddddy

Badoudn wrote: »

2) Can the costs associated with the lease extension be paid out of the sale of the property e.g. agreed with the buyer and freeholder to complete and extend the lease on the same day?

In theory, yes - but it would require the cooperation of the freeholder.

And some freeholders would essentially say - "I'll only cooperate if you agree to pay me £x for the lease extension" (where £x is an inflated amount).

Plus there are time limits on the statutory lease extension process. If you haven't found a buyer (or your buyer isn't ready) by the deadline, your application will be automatically withdrawn, and you'll have to wait a year before you can start again.