Marriage Value when I own a share of freehold

James12377

Hello - I hold the share of freehold with one other flat in a converted house.

I am looking to sell soon but the estate agent advised me that I need to extend my lease to increase property value. My current lease is 65 years whilst the other freeholders lease length is 95 years.

I am relying on the goodwill of the other freeholder to sign my extension but a friend mentioned I may need to pay the other freeholder marriage value.

I suppose my question is: do I have to pay marriage value if i am a share of freeholder?

Any advice here would be greatly appreciated.
Thanks
J

TrickyDicky101

Of course you do - extending your lease will reduce the value of the freehold. Thus you would need to compensate the freeholder (which also includes you).

Whether or not this other freeholder will agree to the extension without compensation is another matter.

Soundgirlrocks

It would be worth checking the company accounts to see what if anything they paid to extend their lease

James12377

thanks for your replies

@TrickyDicky - I've looked at a lease extension calculator and it looks as though it could cost c. £15k to extend the lease. Does that then mean that I would need to pay £7,500 each to both myself and £7,500 also to my fellow freeholder? (appreciate the advice here)

@SGR - thanks, we own the share of freehold directly rather than via a company so not sure if i can check this (thanks for the reply)

TrickyDicky101

Essentially that is what it would cost to you (ie £7.5k) without taking any other factors into account (such as fees and/or a generous co-freeholder who doesn't expect you to pay anything!).

EDIT: I would definitely approach the co-freeholder about extending and see if they expect any form of payment for it - they might not after all. You can broach that subject in any way you think might minimise the chances they do ask for payment.

G_M

Bake a cake and invite them to tea for a freeholder' meeting.

AdrianC

Statutory extension would include marriage value.
You don't have to use the normal formula for a statutory extension. Your fellow joint freeholder and you (with your joint freeholder hat on) can come to whatever different agreement with you (with your leaseholder hat on) that all three want.