Buying flat, lease length may not be as expected

devildolly5

Hi

We are in the process of buying a flat intended as a buy to let. The flat we offered on was marketed at OIEO £185K. We know the area very well, and with crossrail coming in a few years were happy to put a first and final offer of £187K which was accepted. All fine.

The property was marketed as being sold with a renewed lease of 100 years. I know not to believe what estate agents say so I read this as 'maybe' to be sold with a renewed lease.

Title deeds came back and it shows that the lease has 76 years remaining. We are in the process of waiting for their solicitors to come back to clarify if the vendors have any actual intention of renewing the lease, as the lease is what we are essentially buying.

A couple of questions -

1. Has anyone gone through the process of renewing a lease that a vendor has started (attributing the renewal to us before selling) so that you can avoid the 2 year wait?
2. If you have, did you reduce your offer by the amount of the renewal before exchange?
3. Did you wait for the vendors to renew the lease?

As the lease is under 80 years, we know we will have to add marriage costs to the lease renewal. We are prepared to walk away if necessary as this is a financial decision, not one of the heart.

Just wanted to hear any experiences of people who have gone through the same process.

eddddy

So it sounds like you/they plan to follow the statutory route.

It could take 6 to 18 months to complete the lease extension - it may even need a court case to decide on the cost. It depends how 'difficult' you and/or the freeholder are.

If you offered on the understanding that there was a 76 year lease, you don't really have grounds to reduce your offer.

If you offered on the understanding that there was a 100 year lease, you do have grounds to reduce your offer.

AlexMac

We walked away from several flats during our search last year because they had leases less than 83 years , and eventually bought one with a long lease (and lovely low service-charges, as its a shared freehold, so well-managed and very well maintained by us leaseholders ourselves).

I was surprisingly impressed that in each case, the EAs had taken the trouble to find out and accurately describe the leasehold arrangements - not always the case. They did this orally, or in emails, rather than on the property description, so a misrepresenation case would have been difficult to prove, but I'd have been mad as hell if they had misinformed us.

So I'd now use the calculator on this site to get an idea of lease extension/marriage value- or establish how much this will cost, and reduce my offer by a big proportion of this, making it plain that you're doing this because the vendor or their agent deceived you,

But are you prepared to walk away if they refuse?

devildolly5

Thanks for the replies.

Eddddy - we did offer on the basis that flat was sold with a renewed lease.

AlexMac - we are prepared to walk away. I have looked at the costs on various calculators and they come up at £8-10,000 as an estimate. I think if they haven't extended, we will see if they can start the process so we don't have to wait two years, and offer a lower price accordingly. If they don't accept, so be it.

The property has been for sale since early Sep. Apparently a buyer pulled out a few months ago. I suspect this was for the lease now. Plenty of flats have renewed with the freeholders in the same block/estate so I don't think this will be difficult provided this process has started.