Shared Freehold Lease

Knivo_2

Hi, I am looking for any advice that anyone may have regarding buying flat in a shared freehold. I am currently in the process of buying but my solicitor has found a few peoblems.

1. The period left on the lease is only 65 years and my mortgage company need a total unexpired lease of 70 years (including the 35 yr mortgage term). I have found out that i would be able to reduce my mortgage period to fit in with the lease but i am still worried that this lease is too short?

2. I have enquired with the vendor and their soliciotr if the resident's committe would consider extending the lease prior to sale and that this is something that i require if the sale is to go through. They are not wanting to do this and are being quite unhelpful. Is this a potentially bad sign for the future when the lease needs extending? Is there anything else that can be done?

3. I also have a (well beahved) dog, which the estate agents informed woud not be a problem in a shared free hold though, at the last minute the other residents have refused to let me take the dog into the flat ( as per a grey clause in the leasehold agreement). The current residents of the flat keep a cat in there, so i assumed it wouldn't be too much of a problem to bring a dog along. Is there any way could appeal to the residents of the block of flats?

I am quite far ahead with the purchase of this flatt and there is chain in which others are reliant on me to purcahse but all theses factors are making me nervous. The estate agents are getting really pushy. Any advice would be greatly appreciated.

pip_on_the_move

When we have had lease/freehold problems we've always spoken to LEASE ( http://www.lease-advice.org/newintro.htm ). They give free advice and have always been incredibly helpful... don't know what we would have done without them. They can tell you all about lease extensions etc.

As for your dog, if there's a clause in the lease that prohibits you from keeping an animal in the property without the consent of the freeholder/leaseholders/management company then you wouldn't be able to have your dog in the flat if they refused consent. My mum moved into a flat where the leaseholders were iffy about her dogs, and although they finally gave their consent they have tried ever since to force her to get rid of them. There is sometimes a clause that actually allows the leaseholders/freeholder/management company to withdraw their consent later anyway, so they can change their minds down the line. If there's no clause in the lease then there's nothing the other leaseholders can do unless the dog is a nuisance. Your solicitor would be able to clarify the terms of the lease (and LEASE would be able to help too).

Doozergirl

You can extend the lease yourself once you've bought and as you also own a share in freehold, it should be cheap to do it. If your vendor won't do it for you then ask them at least to get a quote for the lease extension so you know how much it will be (you have to pay all the legal fees involved too, your and the residents association).

I think the dog is a bigger problem than the lease! Could you stick some pointy ears on him and teach him to look disinterested? (sorry )

Doozergirl

Actually, ask your solicitor to look at the 'grey' clause about animals and give you any possible interpretations. If it is that grey then the RA would have a hard time making the ban stand up.

RiskAdverse100

I would be extremely worried that the seller cannot arrange for the lease to be extended at the same time as the flat is sold to you.

Yes, this is a very bad sign for the future!

If the freehold was bought by the flatowners (in the name of a company?) fairly recently then the main reason for doing so was no doubt because leases were getting short and they wanted to be able to extend these for no additional payment.

If this did happen and the leases are still short then you have to ask why.

A short lease with a share in a freehold company is still a short lease if you cannot get the other members of the company to agree to extend the lease.

As you have already found out a lease with only 65 years left on it is too short for some lenders.

I would go back to the seller and make it very clear that he must arrange for the lease to be extended now. The additional paperwork needed is very straightforward.

RiskAdverse 100

Knivo_2

Doozergirl wrote:

You can extend the lease yourself once you've bought and as you also own a share in freehold, it should be cheap to do it. If your vendor won't do it for you then ask them at least to get a quote for the lease extension so you know how much it will be (you have to pay all the legal fees involved too, your and the residents association).

I think the dog is a bigger problem than the lease! Could you stick some pointy ears on him and teach him to look disinterested? (sorry )

Thanks. The dog is a bigger problem... It's killing me, as i've spent so much on the outlay to try and buy the flat. I have looked into extending the lease myself but i think it would be quite expensive.

Knivo_2

RiskAdverse100 wrote:

I would be extremely worried that the seller cannot arrange for the lease to be extended at the same time as the flat is sold to you.

Yes, this is a very bad sign for the future!

If the freehold was bought by the flatowners (in the name of a company?) fairly recently then the main reason for doing so was no doubt because leases were getting short and they wanted to be able to extend these for no additional payment.

If this did happen and the leases are still short then you have to ask why.

A short lease with a share in a freehold company is still a short lease if you cannot get the other members of the company to agree to extend the lease.

As you have already found out a lease with only 65 years left on it is too short for some lenders.

I would go back to the seller and make it very clear that he must arrange for the lease to be extended now. The additional paperwork needed is very straightforward.

RiskAdverse 100

Thanks. I have asked the seller to approach the resident association who manage the freehold but they are in no hurry to renew the lease and are saying that he should find another buyer with a shorter mortgage period. The seller also wants to sell ASAP. It's getting complicated. The residents association are saying that the lease for the shared freehold is going to be renewed this year. I understand that it might be possible to arrange some sort of binding contract where the residents management formally make a committment to renewal of the lease at set date - but not sure if this can actually be requested as a condition or clause of the sale?

RiskAdverse100

It will be very difficult to include in your contract a committment by the residents company to extend your lease as the contract is between you and the seller. However, it is certainly worth getting something in writing that is separate to the contract dealing with it.

I assume that the seller is a member of the company. This being the case I simply do not understand why the company appears to be refusing to assist one of its own members with a sale.

RiskAdverse100

Richard_Webster

I assume that the seller is a member of the company. This being the case I simply do not understand why the company appears to be refusing to assist one of its own members with a sale.

Trouble is this is such a confusing issue that even mmeber sof the management company get mixed up about it. There is no good reason why they shouldn't agree to extend but soemtimes people just cannot see the logic. Really the seller needs to pressure them to get off their backsides because sooner or later they will be selling their own flats.

A short lease with a share in a freehold company is still a short lease if you cannot get the other members of the company to agree to extend the lease.

As you have already found out a lease with only 65 years left on it is too short for some lenders.

Just because they should do it doesn't mean they will. You could for instance have some of the flat owners saying things like "We're shared freehold, we haven't got leases..." There is tremedous confusion about and therefore you do need to be careful - try to get to talk to the people who are actually running the company and find out why they want to delay doing a lease extension.

As a conveyancing solicitor I believe the information given in the post to be useful but I accept no liability except to fee-paying clients.

Richard_Webster

I assume that the seller is a member of the company. This being the case I simply do not understand why the company appears to be refusing to assist one of its own members with a sale.

Trouble is this is such a confusing issue that even members of the management company get mixed up about it. There is no good reason why they shouldn't agree to extend but sometimes people just cannot see the logic. Really the seller needs to pressure them to get off their backsides because sooner or later they will be selling their own flats.

A short lease with a share in a freehold company is still a short lease if you cannot get the other members of the company to agree to extend the lease.

As you have already found out a lease with only 65 years left on it is too short for some lenders.

Just because they should do it doesn't mean they will. You could for instance have some of the flat owners saying things like "We're shared freehold, we haven't got leases..." There is tremedous confusion about and therefore you do need to be careful - try to get to talk to the people who are actually running the company and find out why they want to delay doing a lease extension.

If they prevaricate and don't really understand wht it is all about you could have big problems in the future. Although, morally, they shouldn't charge for an extension, if the majority votes to do so then there is nothing legally to stop them!

As a conveyancing solicitor I believe the information given in the post to be useful but I accept no liability except to fee-paying clients.