Expiring Lease

LiamNorthEast

I live in a property the leasehold of which expires on September 30th 2022, the leaseholder is Newcastle City Council of which payment of something less than £2.00 ground rent is paid a year. Can anyone advise what I should be doing? Will I be able to extend the lease? Is my situation hopeless?

This has been my address all 49 years of my life.

mije1983

Do you own the property? I assume there is no mortgage on it if you do?

LiamNorthEast

My mother owns the property though she lives elsewhere.

da_rule

Do you mean that the Council is the freeholder?

sal_III

If your mother "owns" the property, then she is the Leaseholder not Newcastle City Council, which is probably the Freeholder. Important difference.

Why/how did you let it slip to 4 years remaining? It will be extremely costly to renew it at this point, more or less the price of the property.

Take a look at this for more information on the subject:
https://www.moneysavingexpert.com/mortgages/extend-your-lease/

LiamNorthEast

da_rule wrote: »

Do you mean that the Council is the freeholder?

Yes that is right

I was totally unaware of this expiring lease and only discovered after my fathers death last year. Does the fact the council is leaseholder work in my favour? they less likely to indulge in unscrupulous behaviour Also does the fact the ground rent is so low (less than £2.00 per annum) not also work in my favour?

This is a reply I received from the council. (Property Portfolio and Markets Service)

There are two options available in terms of the lease. Either a lease extension of 50 years or to purchase the freehold. I strongly recommend that you seek independent legal advice from a solicitor experienced in this area.

The lease extension requires the leaseholder to have owned the property for a minimum of two years and to serve a Notice of Leaseholder’s Claim on the Council as freeholder. There is no premium payable but the leaseholder is responsible for the payment of all surveyor and legal costs involved. The extension would be for 50 years, however, the ground rent will be reviewed at the end of the current lease and after 25 years of the extension period and it will increase significantly. There are also implications in terms of lending requirements etc.

Purchasing the freehold involves payment of a premium and all fees, we have waived the need to occupy for two years and service of notice to assist. Due to the short term left on the lease the premium will be high, however, a valuation must be carried out to establish this figure. If you wish the Council to carry out the valuation there is a fee of £200 payable now and it is non-refundable, however, it will be deducted from your final costs should you proceed to completion. Please note that the closer you get to lease expiry (of the current lease) will increase the cost of the freehold.

In respect of timescales, this usually takes around two to three months.

Please seen independent legal advice and I look forward to hearing from you on how you wish to proceed.

Surely the council wouldn't throw me onto the streets after me living here all my life? Or maybe they would.

sal_III

The fact that you keep confusing Leaseholder and Freeholder, indicates that you don't have firm grasp on what these terms entail. I strongly suggest you catch up on the matter fast. The government website is a good starting point:

https://www.gov.uk/leasehold-property

Then as suggested by the letter from the council seek some independent legal advise, the cost of extending the lease and/or purchase of the freehold is likely to be in £10'000s.

As it stands after 22.09.2022 your mother will no longer won the property, so the council will be within their legal rights to repossess it. Whether they will exercise their legal right, when and how only the council can tell you. How long you have lived in the property is irrelevant.

mije1983

I would take the council's advice and seek legal help ASAP. It's not going to be a cheap process, but it needs resolving. The fact you have been there nearly half a century unfortunately has no bearing. Only the council could say what they will do when the lease expires, but yes they could reposses as your mother's (your) right to occupy the property will have expired.

LiamNorthEast

That is true, my knowledge in this area stands at Year Zero....all the jargon is hard to digest

" the cost of extending the lease and/or purchase of the freehold is likely to be in £10'000s."

Isn't that not in conflict with reply from council where she says

"There is no premium payable but the leaseholder is responsible for the payment of all surveyor and legal costs involved. The extension would be for 50 years, however, the ground rent will be reviewed at the end of the current lease and after 25 years of the extension period and it will increase significantly

PasturesNew

LiamNorthEast wrote: »

Surely the council wouldn't throw me onto the streets after me living here all my life? Or maybe they would.

In short: Yes, they would.

When the property was purchased it had a lease of X years. At the end of X years the property reverts back to the freeholder "for free". In short, if you do nothing, then come 2022 you will have to move out, they get it back, they can sell it, they pocket the money.

You need to get the prices to extend the lease and do it. Or buy the freehold.

If you do nothing, you will have to hand the property back to them in 2022. That's how leases work.

Get those prices.... soonest... take legal advice ... soonest. Do not delay as none of this will magically "go away".

csgohan4

LiamNorthEast wrote: »

That is true, my knowledge in this area stands at Year Zero....all the jargon is hard to digest

" the cost of extending the lease and/or purchase of the freehold is likely to be in £10'000s."

Isn't that not in conflict with reply from council where she says

"There is no premium payable but the leaseholder is responsible for the payment of all surveyor and legal costs involved. The extension would be for 50 years, however, the ground rent will be reviewed at the end of the current lease and after 25 years of the extension period and it will increase significantly

no as the leaseholder all costs are yours to bear to extend the lease, this is an expensive lesson for your family not knowing how much is on the lease.

Council or not, they are not a charity and they will repo the property when the lease runs out