Expiring Lease

LiamNorthEast

These replies are scary & frightening but if the council says for extending lease

"There is no premium payable but the leaseholder is responsible for the payment of all surveyor and legal costs involved." why does that not stand?

Furthermore she says

"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."

which I took to mean ground rent can't increase for 25 years

If the council is correct and surely they would know why would the cost be tens of thousands as some forumites think?

PasturesNew

In short - when you buy a leasehold property you are buying (for the price you paid) the right to live there until the end of the lease. For X years. With the opportunity of extending the lease at some point during ownership. With every passing year the lease length reduces by 1 year and the cost of renewing the lease increases.

At the end of the lease you move out and hand it back. The freeholder then sells a brand new lease to somebody else to live there for X years.

This is how (almost) all leases work on property - and most people don't ever get to the stage where they have to hand it back. Most people extend the lease.

You also can't sell it - with such a short lease the property is currently "worth" probably less than 2-3 years' worth of rental value.... unless you've got something tucked behind Harrods in which case there'd be somebody willing to buy a 3 year lease and walk away at the end of that....

bouicca21

Although the council aren't asking for a premium for a lease extension, they are only offering 50 years, which means the house won't be mortgageable, but will solve the problem for your lifetime. I'd be wanting to know what sort of ground rent they would require. I doubt it would be as low as the existing ground rent.

Buying the freehold is the more expensive option, but gives you a mortgageable property that you could sell at some point in the future. You would lose the ground rent but become responsible for maintenance and repairs; of course depending on the terms of the lease you (or your mother) may already bear that responsibility.

You need legal and financial advice asap.

xylophone

The council has advised that the lease can be extended for fifty years at no premium but the leaseholder (your mother) will have to bear the cost of the necessary survey and legal work.

The ground rent will be reviewed in 2022 (at the end of the current lease) and again after 25 years of the extension period - it could well be increased at the 2022 review?


If your mother wishes to buy the freehold, then there will be a substantial premium but what this will be can only be established after a survey - the Council can arrange this but she will need to pay them £200 up front for the service.

If she decides to proceed, the council will deduct this from any money owed to them in connection with the purchase - she will bear the cost of all fees.

She would need advice from a conveyancing solicitor specialising in this area.

LiamNorthEast

My mother is in no position to do anything as she has myloma it's all on me, currently the only resident who's knowledge in this area is I said earlier at *Year Zero*

A lease extension to cover the rest of my lifetime (I'm aged 49) would seem best bet.....but if that is going to cost more than a couple of thousand as some forumites suggest then that is off the table too. I can't find 10's of thousands

What a murky area this is

da_rule

Does your mother still have mental capacity? As it is her that will need to sign all the documents etc.

It appears the Council is offering you an informal extension, with the potential for higher ground rents after 2022.

There is third option; a statutory lease extension. This would mean that there would be no ground rent and the extension would be for 90 years. You would have to pay a premium and the legal/valuer costs of the Council.

seven-day-weekend

I am paying to extend the 54-year-lease on my son's flat to 125 years and the total cost including legals is around £14k.

The freeholder is a private concern and not a council, but as others say, the shorter the lease, the more expensive it is.

HampshireH

Your mother is the leaseholder.

Unless you have a legal right to act on her behalf you won't be able to do anything about the situation.

Your mother needs to be an active participant. At the end of the day this is her property. If you pay to extend the lease it still remains her property.

She will need to sign it all off.

I understand from your previous post your mother is unwell and living elsewhere. Therefore the assumption is she is mortgage free on this property from your comment she owns it.

The council at this stage have no responsibility to accommodate you should they repossess in the future.

Your mum definately needs to seek legal advice.

HampshireH

Edit to above : Unless you have POA for the legal stuff

LiamNorthEast

My mother has near full mental capacity just virtually no energy which isn't going to change and has not lived at the address for many years, actually decades. Though it was still her official address until only a few years ago

I will try Citizens Advice Bureau.