Leasehold flat lease extension offer, is this a good deal or not?

betsybargainhunter

We have 59 years on our lease, we want to extend by 40 years so its a 99 year lease.

We have been offered a new 99 year lease by the freeholders for £7950. Plus freeholders legal fees and also freeholders surveyor fees which is £600. And then our legal fees whatever that is.

And would be a higher ground rent, which would be £100 a year and doubles every 25 years. (We are planning to sell and move in the next year)

Our flat was bought for £113000 in 2010 and is in Nottinghamshire if that makes a difference. What it is worth now I don't know as not had it valued, but depending on the market would be at least £100000, but I would hope a bit more.

We haven't had any valuations to do with lease or otherwise but have contacted a solicitor.

Our ground rent is currently £40 a year.

Is the offer that they have given a good offer or not?

Would it be worth going to a leasehold tribunal, or can we haggle the lease amount with freeholders without involving solicitors etc? Has anyone done this? Can't get access to that amount of money at the moment unfortunately.

If anyone has any advice I'd be very grateful, many thanks.

Suarez

So you purchased the flat with a lease of 62 years?

How much are the other flats selling for in the area?

If you wanted to extend through the Leasehold Reform, Housing and Urban Development Act 1993 then it will cost around £12,000 but you would get 90 added instead of 40 and zero ground rent. I would seek advice from a surveyor specialising on leaseholds.

hamster2013

why not sell with the 59year lease?
you think that you will get at least £10k more if you extend it ?

Suarez

hamster2013 wrote: »

why not sell with the 59year lease?
you think that you will get at least £10k more if you extend it ?

You will only attract cash buyers because most mortgage companies wont accept short leases.

hazyjo

hamster2013 wrote: »

why not sell with the 59year lease?
you think that you will get at least £10k more if you extend it ?

Not likely to be mortgagable with 59 years so I would say the lease extension would at least make it easier to sell, and not to such a limited market (cash buyers, etc).

Jx

betsybargainhunter

Suarez wrote: »

So you purchased the flat with a lease of 62 years?

How much are the other flats selling for in the area?

If you wanted to extend through the Leasehold Reform, Housing and Urban Development Act 1993 then it will cost around £12,000 but you would get 90 added instead of 40 and zero ground rent. I would seek advice from a surveyor specialising on leaseholds.

Yes when we bought the property we were not made aware that we would have to extend the lease to sell. the solicitor didnt make it clear at the time, we were first time buyers, and admit we were clueless. it has been and will be a very expensive mistake.

Another flat nearby is for sale for 95000 but have seen the estate agent pics and it isn't as nice as ours, we have a new kitchen and are on the top floor, that flat is on the middle floor. Another flat is for sale at 120000 but its bigger than ours.

Yes the lease was 62 years to start with.

richardw

Does the freeholder have many flats?

Richard_Webster

Quote:
Originally Posted by Suarez
So you purchased the flat with a lease of 62 years?

How much are the other flats selling for in the area?

If you wanted to extend through the Leasehold Reform, Housing and Urban Development Act 1993 then it will cost around £12,000 but you would get 90 added instead of 40 and zero ground rent. I would seek advice from a surveyor specialising on leaseholds.
Yes when we bought the property we were not made aware that we would have to extend the lease to sell. the solicitor didnt make it clear at the time, we were first time buyers, and admit we were clueless. it has been and will be a very expensive mistake.

Another flat nearby is for sale for 95000 but have seen the estate agent pics and it isn't as nice as ours, we have a new kitchen and are on the top floor, that flat is on the middle floor. Another flat is for sale at 120000 but its bigger than ours.

Yes the lease was 62 years to start with.

So you should be considering making a claim against the solicitors who acted or you - did they not warn you of the likely expense of extending when you wanted to sell? They might not have given you an accurate figure (not their job) but at least they could have told you it could be a 4/5 figure sum.

ctprod

I think it is great there is a forum.
I have a question if i may.
1- my lease will cost £2870 to extend from 74 years to 125 yrs. I know it is overpriced, but i am willing to accept that. I have a copy of the lease.

1-what are basic mistake people make when extending leases, either through ignorance or not asking their solicitor the right questions?

2-can a freeholder add clauses into a lease on extending, knowing full well laymen find leases hard to read? If i dont know the content of the original lease, how would i know if a restrictive clause has been added?

ps i have gone to the leasehold tribunal service Tottenham Court Road, London. They did not answer my question, even after looking through the lease.

cattie

ctprod wrote: »

If i dont know the content of the original lease, how would i know if a restrictive clause has been added?

Surely you would have been given a copy of the lease when you bought your flat? If not contact the solicitor who you used for the legals & ask that they look back through their files & send a copy to you now.