Lease renewal with leases 'above' mine

joe_g99

Hi,

I'm in the final stages of buying a leasehold flat and have spotted something that might prove awkward later on, the flat I'm buying is leasehold and it is in a building that is also leasehold, in fact there is 3 leases 'above' mine, at the moment all have the same term, 138 years remaining

I know its a long way from now but I'm a little concerned what will happen if/when I want to renew the lease, as far as I'm aware I've got the right to renew the lease but I also cannot have a lease longer than the leases above me.

Does anyone know what would happen if in 50 years time I decide to renew the lease and the lease above mine, the one for the whole building has not been renewed?

I know I'll probably be dead by then but if I'm lucky enough to be alive or have kid's it could dramatically affect the value of the flat!

joe_g99

Just a quick bump in case anyone has experience of similar?

warwicktiger

Normally a lender will only lend for a term of half the remaining lease, meaning that a common term for a mortgage for a potential purchaser is 25 years, meaning 50 years need to be left on the lease. You have 138, so I would diary this for 2102, 88 years time and start worrying then about struggling to sell..

princeofpounds

http://www.newsontheblock.com/buying-your-freehold/23182/lease-extensions-under-headleases.thtml

All a bit legalese, but I think the basic conclusion is:

It tends to work out at fine at LVT but some of the legal areas are technically untested (precisely because disputes are so rare).

eddddy

I don't claim to be an expert on this, but if you go down the statutory route, you will be looking for a lease extension of 90 years.

So you have to go up the chain of head leaseholders / freeholder until you find a 'competent landlord'.

e.g. if your immediate head leaseholder only has a lease of a few days longer than yours, they can't offer an extension of 90 years, so you have to go up another level. You must keep going up the levels until you find a superior leaseholder with a lease at least 90 years longer than yours - or otherwise you reach the freeholder.

And that's the 'competent landlord' who can grant you a lease extension, on the terms documented in the leasehold reform act.

LEASE (the ex-leasehold advisory service) make the process sound fairly straightforward: http://www.lease-advice.org/publications/documents/document.asp?item=8

But I've heard others say it can be a challenge. You could try phoning LEASE, and/or discussing with your solicitor.

... but with 138 years on your lease at the moment, you don't need to worry too much. (Legislation on this may change significantly in the next 50 years, and I would guess any changes would be in the leaseholder's favour.)

joe_g99

Thanks for that, that was exactly what I was looking for, I'm not looking to renew it now I'm just researching into what problems it could cause me later down the line and it looks like it is possible to renew if not easy which is great