Lease on completion

hazon

Hi,
I am going to view a property which says "new lease on completion"..does anyone know what this means and who is responsible for renewing the lease? Current owner or buyer?
Thanks!

G_M

A new lease will be created between the freeholder and the 1st leaseholder (ie you if you buy).

Either there is currently no lease, or the existing lease is to be replaced.

The terms of the new lease will obviously be the subject of inspection/negotiation before contracts are exchaneged.

Irratus_Rusticus

hazon wrote: »

Hi,
I am going to view a property which says "new lease on completion"..does anyone know what this means and who is responsible for renewing the lease? Current owner or buyer?
Thanks!

Well it can't mean you only see the lease you are buying only after you complete on the purchase. If the "new" lease only comes after you complete, what are you actually buying (and maybe getting a mortgage for) before you complete? A vendor's assurance?

As G_M says it needs to be seen and agreed BEFORE exchange of contracts let alone before completion. Otherwise, the lease could be for any length, at any ground rent and escalator, with any clauses and restrictions.

If presumably the seller is extending the existing lease to help the selling (must be a low one) you need to check the new length, terms, ground rent etc (as yes it is a new lease) and that it be made effective before assigned on to you by the seller. Your solicitor should know all this and advise.

As for who pays, unless you agreed to the renegotiated lease, the seller must've and so they pay. On face value that is what is advertised. But don't presume nothing.

G_M

"new lease" means....... a new lease. Not an extension to an existing lease (unless it's a mis-description).

"on Completion" means the start date for the new lease will be the date of completion. But obviously the terms of the lease will have been agreed in advance (before Exchange) since you would obviously not undertake to buy a lease with an unknown length, unknown ground rent or other fees etc etc.

All perfectly normal. But if you are doing your own conveyancing I'd stop since you don't seem sufficiently clewed-up on the process.

If you are using a conveyancer, well, that's his job to check legal stuff like this so no need to worry.

eddddy

hazon wrote: »

Hi,
I am going to view a property which says "new lease on completion"..does anyone know what this means and who is responsible for renewing the lease? Current owner or buyer?
Thanks!

Looking at this from a more practical perspective...

What difference would it make to you as a buyer - buying a flat with a new lease, versus buying a flat with an existing lease?....

.... Not much really.

Either way, you want to know how long the lease runs for, the ground rent, etc. A new lease can be good or bad, and an existing lease can be good or bad.

Your solicitor will check the lease either way.