what happens if your Lease end?

aviii

I am wondering what happens when you buy a property with a lease on the land and this lease comes to an ends and the owner does not want to renew it?


what happens to your property?

davidmcn

It's not your property any more - the landlord takes it back.

Bear in mind there are circumstances where the landlord doesn't have a choice about whether the lease is renewed. If you have a particular type of property or lease (and country!) in mind then I'm sure people can give you more specific advice.

moneyistooshorttomention

There is a leaseholder advice service that could say the position on this.

I understood the position is that the freeholder can now be forced (by law) to sell the freehold whether they wish to or no.???

princeofpounds

When a long leasehold runs out, the 'owner' basically transfers to another type of tenancy, which can continue to run, run on new terms, or be terminated by the landlord.


http://www.lease-advice.org/publications/documents/document.asp?item=17


It's not quite 'the landlord takes the property back', but that can be the result if the landlord desires.


However, long leaseholders who have been in place for more than 2 years get a legal right to extend the lease through a tribunal process.


So unless you don't have the money to extend the lease at all (and for long leases, especially over 80 years, it's not huge sums of money) then you'll never face that situation.


In certain circumstances leaseholders can also 'enfranchise' and buy the freehold under a similar process. But this isn't always quite as straightforward, especially when there are multiple leaseholders under one freehold.

aviii

from my understanding - if i took out a mortgage on a house that was on Leasehold, and eventually paid it off - i do not own the property if the lease runs out - the property will belong to the landlord of the land if they decide not to extend the lease.

how can this be..?.. would my mortgage be like a rent on the property?

from what i gather - no one would really pay off a mortgage on a lease hold property.

benjus

aviii wrote: »

from my understanding - if i took out a mortgage on a house that was on Leasehold, and eventually paid it off - i do not own the property if the lease runs out - the property will belong to the landlord of the land if they decide not to extend the lease.

how can this be..?.. would my mortgage be like a rent on the property?

from what i gather - no one would really pay off a mortgage on a lease hold property.

Legally speaking, owning a leasehold is renting a property.

However, it is very different to a shorthold tenancy:

• The most obvious difference is that a long lease is usually many decades or even centuries, rather than a term measured in months.
• A long lease is transferable - it can be bought and sold. So the lease itself has a value. This is what you buy when you buy a leasehold property.
• It comes with legal rights such as extending the lease, purchasing the freehold, taking over management of the building.
• Leaseholders typically have freedom to redecorate, install new kitchens/bathrooms etc. It's not quite the level of freedom that a freeholder has, as alterations to the fabric of the building usually require permission from the freeholder. But in most respects it's effectively your property to do what you like with. Many leaseholders have no contact with the freeholder other than receiving demands for ground rent.

As people have said above, most leaseholders would not allow the lease to get down to the last few years - in fact most people try to extend before it gets under 80 years, because it gets more expensive after that. And if you've owned the lease for 2 years the freeholder cannot refuse to extend it if you follow the statutory process for extending.

When you pay off the mortgage, you own the lease outright.