Confused about our leasehold flat

TheGeoff

Okay, quite a long one...

My wife and I bought a flat in 2007, everything went through fine, but now we're planning on selling it we've encountered some minor bumps regarding the lease.

The lease that was put down in all the paperwork was a 99 year lease from 1981. We've been paying a nominal fee to a property management company since we've moved in. We didn't really look in to anything to do with the lease until now when we're looking to sell.

So reading up on Google, it shows extending a lease with 65 years remaining can be quite expensive, so we contacted a property solicitor who advised us to contact the property management company who we've been paying ground rent to about extending the lease.

The company replied saying that their records show that the lease was taken out in 1899 and is a 999 year lease and that if we have an underlease, then we need to contact the owner of the Headlease.

Looking through the paperwork we got when we purchased the flat, we have a copy of the 1981 lease, which shows that the ground rent is £15 per year, we have never paid anyone other than the property management company and not £15, but do not have any copies of the 1899 lease.

Is anyone able to answer the following questions?

a) How do we find the owner of the headlease? We have the addresses on our paperwork of the leasee & leasor (one of which is our address, so think that's the leasee?) And what happens if we can't find the owner of the headlease?

b) what would happen if the underlease (the one taken out in 1981) expires? Does this person maintain any interest in our property?

Any help would be appreciated.

Thanks!

stator

You can search on the Land Registry website and find who the freeholder and leaseholder are, assuming the records are up to date. It costs £3 to download a copy of each of the titles. I'd take a look at those.

westernpromise

You're the lessee. When you bought in 2007 your solicitor as part of the conveyancing process would have checked that the vendor had good title i.e. had both a lease and the right to sell it. Typically the lessor then reassigns the lease to the new lessee, which is you.

This would be the 99-year lease from 1981. I don't think any other level above that matters, although it's a bit surprising you have only just learned of it. The title search when you bought should have revealed it - eg in case there are any restrictive covenants in it about how the property can be used.

When the underlease expires in 2080, whoever owns the lease from 1899 can then sell another one. Presumably this structure would make it hard for you to buy the freehold though.

TheGeoff

Thanks western,

We knew there was a lease in place when we bought the flat and always just paid the ground rent as and when it was requested and assumed we were paying it to whoever took the lease out in 1981.

Obviously it's only now that we're looking to sell that we've looked in to it in a bit more detail.

We weren't too interested in buying the freehold, unless the price for extending was similar.

Doing our research on the internet shows that extended your lease once it's under 80 years can be quite expensive, but surely as our lease is actually a sublease now, then this shouldn't be as big a concern right?

It's all quite confusing - not sure if this 999 year lease running in the background is a good thing or if we're still likely to need to pay a substantial amount to extend the lease anyway.

TrickyDicky101

Have you looked on the Land Registry's site yet at what titles to your property are available? I believe it should show your lease and any other headlease.

You have exactly the same problem if there is a headlease as you would have if there was none (in either case with only 65 years left on the clock). It will be expensive.

Land_Registry

If there is an intervening head lease then your 1981 lease is winding down each year so you have 65 years left. If you did nothing then it would gradually wind down to nothing and be no more i.e. it's term would end

In order to extend your lease it is the owner of the head lease you need to be dealing with as the management explained. If the head lease is registered then the ownership details would appear on the register for the head lease.

If it is not then the starting point would be the landlord/lessor as named in your own 99 year lease. You need to check what is registered though first.

The cost of extending a lease often depends on how long it takes and how many parties have to be involved.

The Leasehold Advisory Service is a useful website for guiding you through the process of extending a lease.

If you only have 65 years left on your lease then selling it may be tricky unless you get it extended first as mortgage lenders are unlikely to offer a new buyer a mortgage whilst a cash buyer may seek to drive the price down as the lease's value could be seen as not being at the market rate for the same reason