Lease Extension Query

strawberries1

Property is on sale foe £270,000 at 75yrs £30GR or £300,000 £150gr at 125yrs.

Can someone please estimate how much it will cost to extend statutorily please? ie at a value of £270k with 75yrs remaining.

I just spoke to a valuer and he says this shouldn't go to the tribunal and should be agreed by negotiation.

eddddy

strawberries1 wrote: »

Can someone please estimate how much it will cost to extend statutorily please? ie at a value of £270k with 75yrs remaining.

Take a look here: https://www.lease-advice.org/calculator/

So the lease extension premium might cost about £15k.

It might take between 6 months and 18 months to do it, and the fees could be up to about £4k.

Realistically, you can't go for a 'statutory lease extension on completion'. So you'd have to buy it with just the 75 year lease (and then complete the process). Is your mortgage lender OK with a 75 year lease?

strawberries1

eddddy wrote: »

Take a look here: https://www.lease-advice.org/calculator/

So the lease extension premium might cost about £15k.

It might take between 6 months and 18 months to do it, and the fees could be up to about £4k.

Realistically, you can't go for a 'statutory lease extension on completion'. So you'd have to buy it with just the 75 year lease (and then complete the process). Is your mortgage lender OK with a 75 year lease?

Yes. It's HSBC and they're happy with it.

I hope to agree with the seller that he serves s.42 notice and assigns it to me.

eddddy

strawberries1 wrote: »

I hope to agree with the seller that he serves s.42 notice and assigns it to me.

Sounds good.

The valuation fee and legal fee for preparing the s42 notice might be £500+, so you need to agree who pays etc.

There is also a small risk that if the s42 notice is served, you buy the flat, then the s42 notice is deemed invalid - you will then have to wait 2 years before you can serve another one.

So watch out for the seller instructing somebody 'cheap' to deal with the s42, who gets it wrong.

strawberries1

eddddy wrote: »

Sounds good.

The valuation fee and legal fee for preparing the s42 notice might be £500+, so you need to agree who pays etc.

There is also a small risk that if the s42 notice is served, you buy the flat, then the s42 notice is deemed invalid - you will then have to wait 2 years before you can serve another one.

So watch out for the seller instructing somebody 'cheap' to deal with the s42, who gets it wrong.

My offer was accepted on the lease as is so I guess I will bear the cost of extension.

I'll like to keep the extension expenditure to £20,000 so the overrall cost is £290,000.

It might be best to negotiate a further £3,000 reduction in purchase price to be on the safe side.

A valuer estimate £695 +vat and £230ph +vat for negotiation. Much more if it goes to tribunal he says.

Tom99

strawberries1 wrote: »

My offer was accepted on the lease as is so I guess I will bear the cost of extension.

I'll like to keep the extension expenditure to £20,000 so the overrall cost is £290,000.

It might be best to negotiate a further £3,000 reduction in purchase price to be on the safe side.

A valuer estimate £695 +vat and £230ph +vat for negotiation. Much more if it goes to tribunal he says.

You will also have to pay the freeholders valuer/negotiator and solicitor which will be at least as much again as your costs, basically because you are paying and the freeholder is not.

eddddy

strawberries1 wrote: »

A valuer estimate £695 +vat and £230ph +vat for negotiation.

So is that just your valuer's fees?

You will probably need to pay a solicitor to prepare and serve the s42 as well.

Plus, as Tom99 says, the freeholder's costs as well. (And the freeholder's valuer and solicitor will charge 'top whack', because they know you have no choice but to pay it.)

strawberries1 wrote: »

Much more if it goes to tribunal he says.

Yep - it can turn into a bit of a game. Sometimes it's better to give in, and pay the freeholder a bit more, to avoid the costs of a tribunal.

(And some freeholders will use the threat of tribunal to make you pay a bit more.)

strawberries1

Yes, that estimate is for me as the buyer so at least x 2 in total.