Drafting a Lease Extension without solicitor......

DanB1

Hello all,

Unusual query which I hope someone can help direct me on. I own the leasehold on one flat in a 2-flat property (purpose built flats, circa 1900), and am in the process of acquiring the full freehold through the 1993 act (leaseholder for other flat wasn't interested in jointly purchasing the freehold, but has participated in proceedings so I can purchase the whole thing).

I have settled on a price with the freeholder, and the solicitor is drawing up the necessary documents. However, only at this point has the solicitor raised the point that not only will we still need to extend our lease (which we knew we had to do), but that it will cost an additional £800 for his services to do the lease extension. I have told him he can stick it up his bum and I'll sort it out elsewhere, as I am very disappointed that he wasn't up front about this cost during initial consultations, and I can't fathom what costs £800 when there is no negotiation, no stat notices etc to be served.

Anyway, long story short, the question is:

If I own the freehold for the whole building, can I just write myself a 900yr extension to my existing lease (81 yrs remaining), register it with the land registry and all is well? Does anyone (ideally with legal background) know the steps in the process? I am sure there is no legal necessity to have a solicitor, but obviously the advantage is they stop you screwing things up (supposedly). Given I will be both freeholder and leaseholder, I can't bear to open my wallet and be pillaged in this way.

Any advice/guidance appreciated.

Thanks.

G_M

Personally, I would have been happy to do the Freehold transfer without a solicitor. Pretty straightforward, and plenty of books, guides etc on how to do it.

But I'd have no idea how to do a lease extnsion so would use a solicitor for that.

But the simple answer is o ring 3-4 local soliciors, and say:

"I own the freehold to a building in my sole name. I also hold the leasehold Title to one of the two flats. I wish to extend my lease. What is involved and how much will it cost?"

You could also ask about costs for extending the other lease if/when that flat owner wishes to do so.

DanB1

Thanks - will do that. We're in London, but I'm going to ring around up north since its a purely paperwork exercise and not dependant on any local market knowledge.

Other flat lease is ~140 yrs, so they won't be renewing anytime soon.

Thanks again.

Richard_Webster

Does the lease have a mortgage on it? If it does the mortgage lender will insist that a solicitor on its panel deals with the lease extension or at least approves it on behalf of the lender.

If there is no mortgage then when the freehold is purchased technically the lease ceases to exist because it becomes "merged" into the freehold. The merger doesn't happen if a mortgage remains on the lease. So if no mortgage on it you don't need to bother extending your lease as it will cease to exist!

This isn't the end of the world - most lenders will accept ta situation where you own the freehold of a building subject to a lease of the other flat. Their security is the whole freehold - and no it isn't pure freehold flat so it isn't unmortgageable.

Here is Nationwide BS's version of the handbook in relation to this issue - many other major lenders will take the same view:

5.8.1 Does the lender accept security which comprises a building converted into not more than four flats where the borrower occupies one of those flats and the borrower or another flat owner also owns the freehold of the building and the other flats are subject to long leases?
Yes

5.8.2If the borrower occupying one of the flats also owns the freehold, we will require our security to be:

the freehold of the whole building subject to the long leases of the other flats; and
any leasehold interest the borrower will have in the flat the borrower is to occupy.

Land_Registry

Our online guidance explains the registration requirements as an extension will normally be done by way of a legal deed.

One thing to perhaps consider is what is the 'need' you mention re extending it? Does that need still exist when you have bought the freehold or are you say remortgaging and they won't lend against the lease as the remaining years are too short? - if it is the latter example then as Richard Webster mentions your lender will insist on oyur using a solicitor.