Buying a flat with a short lease (?)

Hoploz

While you live there, the lease will remain in force as it stands - the ground rent & any increases in this will be as stated, and the service charges will still be shared as defined in the lease. Length remaining wouldn't make any difference.

Once the lease expires it would revert to the ownership of the remaining freeholders. Which in this case, with a 'share of freehold' situation, would be the other owners ... This is not necessarily a legally correct answer, but is how it looks to me.

However, with over 50 years still left, letting the lease reduce further will only make a difference when it is resold. 50k sounds an awful lot, I assume it is a high value property. It will become the problem of whoever sells it, whether it's you (if circumstances change, eg care home fees) or the executor of your will. It won't be sellable to the open market, as a mortgage company is unlikely to lend, but could be sold at reduced market value to another cash buyer or even at auction.

The other house being rented out is an entirely separate issue and makes no difference to the flat and its lease.

KiKi

Hang on - the flat has a share of freehold? Depending on how this is set up, it's possible that a lease extension would cost you very little anyway. If it's one flat in a block of 20 with a managing agent, then yes, the other freeholders may want your money to extend the lease. If it's a flat in a block of 2 or 3 where the other freeholders also own leases, they may be happy for everyone to extend a lease at no charge other than the legal costs as they may have done the same in the past. I've been in that position before.

But to answer your question, you won't be disadvantaged, no.

(I don't see how your thread is wasting anyone's time, by the way. It's a perfectly reasonable question - the fact that you have other properties isn't relevant to the question about a short lease.)

KiKi

cashbackproblems

Odd thread usually id say below 85yrs avoid, but in your case no kids ie no inheritance unless wider family, lease shouldnt be an issue as you wont outlive it

And you have 3 houses - whats the point in worrying about it? Battersea dogs home will be happy i guess!!

Hoploz

Good point from Kiki. When did any of the other flats last change hands? Perhaps this lease issue has already had a precedent set - as Kiki points out, none of the others will be wanting to be liable for a huge sum to all pay to each other, everyone is in the same boat.

I believe you can find out the lengths of the other leases by downloading them from the Land Registry website. It might cost a few pounds for each but if any have changed hands the chances are it has come up previously. I'm sure somehow you could find out what they were charged for their lease extension. This could change everything!

hazyjo

If you genuinely aren't fussed about leaving anything to anyone, OMG just sell the lot and live like millionaires for the next hopefully 15 years! Life's too short, hate to point out the obvious! Do you really want another property to rent out/be a landlord again? The fact you're even thinking about it must mean you've been bloody lucky so far. What if you get tenants from hell who trash it? What if they don't pay? Can you really be !!!!!d with all that?

People often keep properties for their pension. Is it time to release that money? Do you really still want to be landlords at 80?!

Am I missing something?! Even with an income... surely you'd have more if you sold them and banked it!

Maybe I'm on the wrong site lol - I suppose it is a money saving one. Sod that, I'd be spending and enjoying it. (Lost my dad at 70, all my grandparents when I was still in my teens, several friends' parents in their 40s and 50s, and three kids from my younger sister's class at school, who knows what's round the corner...)

Instead of that (albeit luxury) flat with all its associated charges/fees and the rentals, why not just buy one gorgeous bungalow?

Jx

IRememberItWell

VMT for all the helpful and thought-provoking comments. Your advice and views are greatly appreciated.

IRIW

upoiupou

IRememberItWell wrote: »

the existing lease would obviously see us out.

I'm wondering if you've considered the possibility that at a future point you may decide you'd like to move to supported accommodation or long-term care? If so, then you would probably want to sell this flat and the short lease would make that more work, at a time when you probably would want as little work as possible to release the cash.

I've sold a flat with a short lease but share of freehold, and I had to extend the lease myself as a condition of sale. This is because the buyer has no guarantee that the other owners who share the freehold will agree to the extension after the purchase, or that they won't demand a ridiculous amount for it.

Extending a lease with shared ownership of a freehold isn't always straightforward. I have friends who had trouble tracking down all the owners (flats were let out), had to courier papers to remote parts of India and had difficult owners who wouldn't sign the paperwork. In my case, during the process my solicitor discovered that the other owner wasn't really the owner due to probate issues. None of which would be something you'd want if you just wanted to sell quickly without having to put a lot of energy into it.

IRememberItWell

Thanks, upoiupou, for your comment, which is something that had indeed crossed our minds. We have experience elsewhere in this vein when a "non-share-of-freehold" leaseholder wanted a lease extension. In the event the person concerned bought a share of the freehold and extended the lease at the same time. This was heartily welcomed by everyone because the monies from the sale went towards a hefty maintenance levy. However, it must be said that it was a smallish block with all the leaseholders in close contact.
IRIW

IRememberItWell

Another thought regarding the above: in the case of a big block with some 100 flats, the £50K paid for the lease would be a pittance for each of the existing freeholders even if (as the case would be) that the prospective purchaser would foot the legal fees. No doubt many of them would think "not worth having this pittance but better keep the much large sum for our grandchildren in 50 years' time". But on the other hand, does someone without a share of freehold not have the right to buy in?
IRIW

upoiupou

I'm a bit confused by some of this thread, and by the situation here.

This flat has a share of freehold. If all the flats with a share of freehold have a short lease and all want to extend them, then they don't have to pay anything apart from legal fees (and probably something to the land registry?)

If only one or a few flats with a share of freehold want to extend their lease (eg the others already have long leases, or don't care) then they are vulnerable to the other joint freeholders demanding a large amount to let them extend.

Any charges and obligations are as stipulated in the current lease. These would only change if an amendment was made to the lease. Usually leases mirror each other (allowing the other flats access as needed for essential repairs etc). It's possible some may be charged a higher ground rent or service charge depending on something like size, but it seems unlikely that this would depend on length of lease. But you could check by buying copies of all the leases from the Land Registry.

I would be more concerned about how the joint freehold is held - management company, covenant etc - and what the conditions are for the joint freeholders to make decisions. Also, whether the Mem&Arts or other governing document adequately covers the situation of a freeholder selling their flat or dying.