Leasehold Extension Redevelopment clause

jnote

Hi guys,

I am currently extending my lease and a premium was agreed to extend. The lease was 99yrs(currently at 65) to 189yrs(so 155ish from now). My lawyer then informed us about a clause in lease for redevelopment:

"The Landlord may at any time during the periods of twelve months ending on the term date of the Original Lease and five years ending on the term date of this lease apply to the Court under Section 61 of the Act for an order for possession of the Property on the grounds that:-"

"For the purposes of redevelopment it intends to demolish or reconstruct or carry out substantial works of construction on the whole or a substantial part of the premises containing the Property…"

The Freeholder won't take it out, and say it is statutory and normal, and my lawyer says he hasn't come across it. The freeholder has now offered to drop the clause on the basis that there is an informal lease extension but only for 99 yrs from the day of completion, and at the same premium.

Anybody come across this clause? Is it normal? I obviously would prefer a longer lease, but am worried it may impact a sale in future(granted long term future).

Any advice appreciated.

Thanks

bouicca21

My lease was extended by 99 years before I bought the place. The extension is purely an extension - the terms of the original lease continue, definitely nothing about permitting any development.

Edited to add - that makes the lease over 130 years.

jnote

The second offer they have made is basically to extend the lease back up to 99 yrs. So essentially they are extending by 34 yrs as opposed to adding 99 yrs.

bouicca21

Being a bit of a geek I just googled section 61 of the leasehold reform act and it seems to me (ask a proper lawyer though) that the wording in question is operative by reason of the renewal (assuming it has been done under section 56). So I don't think it has to be in the lease, but I doubt it makes any difference in reality.

jnote

The first instance of this clause kicking in would be 2080. Not worrying for us, but if we wanna sell in 30years time, then next buyer might have a big problem with it.

davo75

Letting your lease go below 82 years is very risky, you could be looking at paying a huge amount to renew the leasehold. This calculator I found (http://www.boltburdonkemp.co.uk/professional-negligence/lease-negligence-claims/leasehold-extension-calculator/) shows just how much...pretty scary numbers. Looks like you will be okay for now though!

himou13

Hi - am going through the same thing and the freeholders lawyers have inserted this clause.

Did you go through getting it removed or were you advised to let it stand?

Thanks in advance,

Alice

Sacredcat

I had the same thing added when doing a statutory extension. I think my solicitor said it was normal.
An additional 99 years was what I want for. The fees were higher but I don't ever have to extend again.