Buying a flat with lease under 80 years.

Drewj

Hi,

I am in the process of buying a flat with a lease of 78.5 years left and am well aware what this means in terms of marriage value etc. I negotiated 7k off the price because of this. I am now unsure whether to pay for a 'tenants notice' to be signed by the seller and transferred to me on completion so that I can extend the lease straight away or to try and buy the freehold.The problem is that if the attempt at freehold fails I will be in the position of having to wait 2 years to get a lease extension. The other three leaseholders in the house have all expressed an interest in buying the lease but obviously could back out when the costs become apparent. The one leaseholder that seems most serious about buying the freehold having talked to me has now checked and found that his lease has also fallen below the 80 year bar and a quick land registry check confirmed that all 4 leases were issued at the same time. What I would like to give the other tenants is a very rough idea of the difference in cost in going for the freehold as opposed to lease extension. I have no idea. It has been suggested that I get a lease extension and then attempt the freehold as the increase in years on a lease will knock down the price of the freehold. However money is very tight and the thought of legal fees for both parties twice over is something I would hate. Can anyone advise? Thanks.

cattie

You would be wise to consider buying the freehold in conjunction with the other leaseholders as you then can just grant each flat new leases.

Even though you may not have owned the flat for 2 yrs & have no legal right yet to purchase, it's not really that important, as the other 3 leaseholders are in agreement with buying the freehold then as a majority they will have the right to purchase anyway.

On the subject of extending leases & buying freeholds, you can apply to the freeholder to do either even if you have owned the property for less than 2 years, but he doesn't have to agree to your request untill the 2 yr period is up.

Go here for the best advice on leasehold property & buying the freehold collectively. http://www.lease-advice.org/newintro.htm

Drewj

Thanks for the advice. Yes I would prefer to go for the freehold, I am just worried that the costs may put the other three leaseholders off and they could then choose to go for the cheaper (in the short term) option of lease extention which would be denied me (by right) for two years.

I believe 50% of the leaseholders in a building are needed to apply for the freehold so I suppose the odds are pretty good for one of them to proceed with me. I just wish I could get an idea (before approaching a valuer) how much a freehold extension with marriage value (as under 80 years) is likely to cost, even roughly!

Drew

emg

I could be wrong but I thought the 2 year thing was that the freeholder doesnt have to extend your lease if you have been there less than two years but that doesnt mean they are not allowed to, they can still choose to extend it in the first two years if they wish - there is just no legal requirement for them to do so.

Drewj

This is true but it does mean that you have less bargaining power as you can't then take them to the tribunal if they come out with some outlandish figure.

Drewj