Purchasing a lease/freehold question

Ozret

As per the title.

I'm thinking about purchasing a flat with @ 57 years lease. It'll be a long term (BTL) investment. Due to the short lease it's only open to cash buyers. There is a Freehold company that you can buy into which means you have a technical lease of 999 years, of which I already have an interest in due to owning a flat in the same development

I'm aware that you should wait for 2 years before approaching the Freeholder before purchasing a lease extention, although this can be waived (something that I'm keen to do)
Given that I'd be buying into the Freehold company does the 2 year wait still apply?

I'm handing it over to the MSE masses for discussion, but clearly I'll be taking legal advice in the next few days.

TIA

eddddy

A leaseholder and freeholder can choose to agree to extend a lease at any time they like, on any terms they like.


(However, the law says that a leaseholder can extend a lease, even if the freeholder doesn't agree. But to start this process a leaseholder has to own the property for 2 years.)

Ozret

Thanks, thats clarified the matter a little bit.

Having researched the matter I'm a bit perplexed why there's the '2 year rule'

Any ideas?

G_M

Ozret wrote: »

Given that I'd be buying into the Freehold company does the 2 year wait still apply?

The law is not dependant on who owns the freehold! So yes, the rule still applies.

Of course if the freeholder agrees to extend earlier than 2 years, at a price the leaseholder is happy with, then the 2 year law becomes irrelevant.

As a joint freeholder, you would have a say on this; how many other joint freeholders are there? Have other leases been extended? For free, or for a price?

eddddy

Ozret wrote: »

Having researched the matter I'm a bit perplexed why there's the '2 year rule'

Any ideas?

That's what parliament decided.

They also decided on the '21 year rule' (length of original lease) and '80 year rule' (Marriage Value threshold).


If you're interested, the '2 year rule' is specified in the Leasehold Reform, Housing and Urban Development Act 1993, Part 1 Chapter 2: http://www.legislation.gov.uk/ukpga/1993/28/part/I/chapter/II

Hoploz

I was told by a lady seller that she would apply to extend the lease on a flat I was looking at. She hadn't owned the flat for 2 years (it was an investment buy) but she had owned and lived in another flat in the block for donkeys years so she had an existing relationship with the freeholder. Perhaps that would apply here?