Extend Your Lease guide discussion

[Deleted User]

95 years on a London flat is probably a good length as it is at 80 years that costs become absurd and as the valuer says probably no need to extend. Lucky you with a London flat!! However you must not be aware of the Leasehold Reforms coming into force this year or next - when you can extend the Lease to 990 years. We don't know if costs will be cheaper for those over 80 years, possibly not. 
The campaign site is here https://www.facebook.com/groups/nationalleaseholdcampaign and news here https://www.gov.uk/government/news/government-reforms-make-it-easier-and-cheaper-for-leaseholders-to-buy-their-homes
https://www.ft.com/content/3d56df2f-9dde-4f2b-917d-e082bb2c7e38

pjaj

What about the situation where the leaseholders and the freeholders are one and the same people?
There is a house in London that is split into 2 flats. The way it was set up originally is as a non trading limited company that owns the freehold. The equal shareholders in that company are the 2 owners of the flats, the leaseholders. There are no other parties involved. I believe the leases have some 75 years left to run. What would be the cheapest / simplest way to extend the leases to 999 years each? Obviously no payment would be required.

eddddy

pjaj said:

What about the situation where the leaseholders and the freeholders are one and the same people?
There is a house in London that is split into 2 flats. The way it was set up originally is as a non trading limited company that owns the freehold. The equal shareholders in that company are the 2 owners of the flats, the leaseholders. There are no other parties involved. I believe the leases have some 75 years left to run. What would be the cheapest / simplest way to extend the leases to 999 years each? Obviously no payment would be required.

The two people involved would probably instruct their solicitors to draw up a lease variation.  And they'd need consent from their mortgage lenders to vary the lease.

The type of problems you might encounter include:

• The 'other' leaseholder / joint freeholder won't sign the paperwork (perhaps because they're lazy, they don't understand, or they don't like you.)

• The 'other' leaseholder / joint freeholder wants a chunk of money in exchange for agreeing to your lease extension

• You and the 'other' leaseholder / joint freeholder can't agree on who should pay the legal fees for the lease extension

It's strange that they didn't extend the leases to 999 years when they bought the freehold - the legal fees would have probably worked out cheaper. (That suggests that they may no understand about lease extensions, or they might have argued over money etc.)

pjaj

eddddy said:

pjaj said:

What about the situation where the leaseholders and the freeholders are one and the same people?
There is a house in London that is split into 2 flats. The way it was set up originally is as a non trading limited company that owns the freehold. The equal shareholders in that company are the 2 owners of the flats, the leaseholders. There are no other parties involved. I believe the leases have some 75 years left to run. What would be the cheapest / simplest way to extend the leases to 999 years each? Obviously no payment would be required.

The two people involved would probably instruct their solicitors to draw up a lease variation.  And they'd need consent from their mortgage lenders to vary the lease.

The type of problems you might encounter include:

• The 'other' leaseholder / joint freeholder won't sign the paperwork (perhaps because they're lazy, they don't understand, or they don't like you.)

• The 'other' leaseholder / joint freeholder wants a chunk of money in exchange for agreeing to your lease extension

• You and the 'other' leaseholder / joint freeholder can't agree on who should pay the legal fees for the lease extension

It's strange that they didn't extend the leases to 999 years when they bought the freehold - the legal fees would have probably worked out cheaper. (That suggests that they may no understand about lease extensions, or they might have argued over money etc.)

Thanks eddddy,

Fortunately none of the above. One wants to sell soon and the other wants to extend and possibly re-mortgage so both have every reason to extend and cooperate. Also they get on fine. There wouldn't be any problem with sharing the fees either, they do so already on an informal basis for any work / decorating that needs to be done on the communal areas or the fabric of the building. 

The reason they didn't set it up that way to start with (in the mid - late 1990s) was neither owned their flat at the time. The limited company holding the freehold was set up by the developer who split the original house into two flats. He then sold to two other parties who in turn sold to the current owner in one case, the other flat has changed hands several times.

I think the basic question here was, if everyone is in agreement and no money is changing hands, what is the easiest / cheapest way of extending the leases?

eddddy

pjaj said:

I think the basic question here was, if everyone is in agreement and no money is changing hands, what is the easiest / cheapest way of extending the leases?

As I say, the two people involved would need to instruct solicitors to draw up lease variations to extend the leases. (And get consent from any mortgage lenders.)

You can ask solicitors for quotes.



If both people are in a 100% agreement, and the solicitor can't see any scope for a conflict of interest between the 2 people - one solicitor might agree to do all the work.

But if there's scope for a conflict of interest, each person will need their own solicitor - which is likely to work out more expensive.

PalmersCol123

Hi there

Does anyone have any experience of renewing the lease as part of the sale of the flat? We have 77 years left on our 2 bed flat worth about 210k and the estate agent has said we can use the equity and the money comes from the sale of the flat.

Wondered if anyone had experience of this and how it went?!

Many thanks in advance

eddddy

PalmersCol123 said:

Hi there

Does anyone have any experience of renewing the lease as part of the sale of the flat? We have 77 years left on our 2 bed flat worth about 210k and the estate agent has said we can use the equity and the money comes from the sale of the flat.

Wondered if anyone had experience of this and how it went?!

Many thanks in advance

You can't do a Statutory Lease Extension for this - you have to negotiate an informal lease extension.

So it depends entirely on the building's freeholder.

The freeholder will need to co-operate, and you'll need to agree a reasonable price (and terms) with the freeholder.

If the freeholder refuses to co-operate (or refuses to agree on a sensible price), it can't happen.

So you should start by contacting the freeholder (or their managing agent) to see what they say.

pdhan

If the freeholder refuses to co-operate (or refuses to agree on a sensible price), it can't happen.

That's not true. If you've lived in the flat for more than 2 years you have a statutory right to extend the lease.

eddddy

pdhan said:

If the freeholder refuses to co-operate (or refuses to agree on a sensible price), it can't happen.

That's not true. If you've lived in the flat for more than 2 years you have a statutory right to extend the lease.

I think you've misunderstood the problem. (I've added a line to my post above to clarify the problem.)

@PalmersCol123 says they want to do a lease extension as part of their sale (i.e. a lease extension on completion).

That won't work with a statutory lease extension.

The only way of making that work is by informally negotiating the terms (and you don't have to own the flat for 2 years for that).

Rah76

Hello
I have been attempting to negotiate a leasehold extension on a flat in London with a housing association via the formal route as the informal quote was so expensive. The housing association didn’t enter into any negotiation with me so I’ve taken it to a tribunal. Now the tribunal has seemingly sent directions to the housing association and reps but not to me. I had the flat valued before I tried to negotiate by a valuer who then advised that they wouldn’t be able to represent me as it would be very expensive.  I understand that I don’t need a solicitor to represent me at a tribunal so am planning to do this myself. I am confused as now I have been contacted by the housing associations valuer to talk through valuations and agree various calculations. I am also very concerned at additional costs being incurred by the housing association that will be passed on to me. Has anyone got any advice?