Extending Lease to Sell Shared Ownership

Jules0606

Hi,
I live in a 50% shared ownership through Guinness Homes and am in the process of extending my 79 year lease in order to sell.

Guinness website states that the fees for Lease extension are £350 plus solicitor fees (to be confirmed at time of application). Yesterday they asked for another £600 for the RICS survey which, as they have taken 2 weeks longer than they originally anticipated to find a surveyor in my area which impacts on the time that I can market the property, I paid.

I've asked them by email twice in the last 2 weeks, for a full list of expected costs for the lease extension and sale, but no one responds. I'm really worried about the additional costs getting me into debt, as without the information, I'm ill equipped to budget for the unlisted extras.

Does anyone know what I should be looking at as far as costs and time frame?

Thanks in advance

eddddy

Hopefully you realise this, but just in case...

The £350 will be Guinness' fee for doing the admin work. You will have to pay for the actual lease extension as well.

The RICS surveyor will probably calculate the cost of the lease extension using a formula.

Hopefully, the RICS surveyor will use the 'statutory lease extension formula', and hopefully you will only have to pay 50%, as you only own 50%.

If that's the case, you can put details in this lease extension calculator, and then calculate 50% of the result:
https://www.lease-advice.org/calculator/


But in theory Guinness can calculate the cost using any formula they like, and/or ask for any price they like.

Don't they have a fact sheet explaining how they do lease extensions?

I would expect you to have to pay:

• Guinness' Admin fee
• Guinness' RICS surveyor's fee
• Guinness' Solicitor's fee
• Your own Solicitor's fee
• The premium (price) for the lease extension

And if you want to challenge the premium (price), maybe your own RICS Surveyor's fee


If you can't afford all the above, you can investigate the option of selling your home with a 'lease extension on completion'.

That means that the buyer effectively pays for the lease extension, and the amount you receive is reduced accordingly. (But you'd need Guinness' co-operation for this.)

Jules0606

Thank you very much for the information

sofsofsof

hi jules i have private messaged you about this and would really appreciate a response!

sofsofsof

eddddy wrote: »

Hopefully you realise this, but just in case...

The £350 will be Guinness' fee for doing the admin work. You will have to pay for the actual lease extension as well.

The RICS surveyor will probably calculate the cost of the lease extension using a formula.

Hopefully, the RICS surveyor will use the 'statutory lease extension formula', and hopefully you will only have to pay 50%, as you only own 50%.

If that's the case, you can put details in this lease extension calculator, and then calculate 50% of the result:
https://www.lease-advice.org/calculator/


But in theory Guinness can calculate the cost using any formula they like, and/or ask for any price they like.

Don't they have a fact sheet explaining how they do lease extensions?

I would expect you to have to pay:

• Guinness' Admin fee
• Guinness' RICS surveyor's fee
• Guinness' Solicitor's fee
• Your own Solicitor's fee
• The premium (price) for the lease extension

And if you want to challenge the premium (price), maybe your own RICS Surveyor's fee


If you can't afford all the above, you can investigate the option of selling your home with a 'lease extension on completion'.

That means that the buyer effectively pays for the lease extension, and the amount you receive is reduced accordingly. (But you'd need Guinness' co-operation for this.)

hi, when you say this do you mean to input into the calculator the price of the home at full value / good lease and 0 ground rent? even if you pay rent on the equity you do not own? for example, we pay a rent for the unbought equity and a service charge that is for buildings insurance. any advice would be great!

sofsofsof

Jules0606 wrote: »

Thank you very much for the information

Hi Jules i have PM'd you in EXACT same situation!!


Guinness told me £350 + Solicitor Fees + £275 RICS valuation + Lease extension fee which apparently have to pay 100% regardless of %.. this i feel is naughty so i have raised it with relevent authorities and queried its moral standing as well as on legal basis. Considering also Guinness is registered as a Not For Profit / Charity it makes me wonder if a 'charity' does behave like this as it is blatant profiteering!
if you type Lease into google there is a official legal lease page with a calculator for costs.. mine were projected at £4000-£5000 personally.

mk_78

sofsofsof wrote: »

Hi Jules i have PM'd you in EXACT same situation!!


Guinness told me £350 + Solicitor Fees + £275 RICS valuation + Lease extension fee which apparently have to pay 100% regardless of %.. this i feel is naughty so i have raised it with relevent authorities and queried its moral standing as well as on legal basis. Considering also Guinness is registered as a Not For Profit / Charity it makes me wonder if a 'charity' does behave like this as it is blatant profiteering!
if you type Lease into google there is a official legal lease page with a calculator for costs.. mine were projected at £4000-£5000 personally.

I have a shared ownership property with a council and their policy is that the valuation of the lease extension is calculated using the 100% of the property value, but I only pay the lease extension on the percentage I own...

The shared ownership leasehold extension valuation is calculated using the 100% value of the property but the amount paid for the lease extension will depend on what percentage of the property you own.
For example, if the leasehold extension valuation is £10,000. A leaseholder with a 50% share will pay £5,000 and a leaseholder with a 20% share will pay £2000.

https://www.milton-keynes.gov.uk/property/shared-ownership-extending-your-lease


Maybe ask your housing association to provide you with their written policy that you must pay 100% of the lease extension, even if your share is only 50%


Edit: the fees involved for MK council are £500 valuation fee, their legal costs approx £1000 PLUS the % value of the lease extension.

sofsofsof

mk_78 wrote: »

I have a shared ownership property with a council and their policy is that the valuation of the lease extension is calculated using the 100% of the property value, but I only pay the lease extension on the percentage I own...



https://www.milton-keynes.gov.uk/property/shared-ownership-extending-your-lease


Maybe ask your housing association to provide you with their written policy that you must pay 100% of the lease extension, even if your share is only 50%


Edit: the fees involved for MK council are £500 valuation fee, their legal costs approx £1000 PLUS the % value of the lease extension.

Yeh i live in MK and unfortunately am with shoddy ole "charity" registered Guinness who want 100% paid by us regardless, this is obviously something ive raised with housing minister and with MK council to see what they have to say on it.. strangely enough it says in Lease that the Landlord must act as in a Not For Profit Basis... (interesting i thought)...
Guinness ask £350 + Solicitor fees + RICS (accord to them region £275) then 100% lease valuation...
They said to me on the phone they dont have to grant us it and that if they do they wont look at it till at 80years so sounds ok in that respect,i think all leases can be renewed at 80 years tho regardless?

sofsofsof

Jules0606 wrote: »

Hi,
I live in a 50% shared ownership through Guinness Homes and am in the process of extending my 79 year lease in order to sell.

Guinness website states that the fees for Lease extension are £350 plus solicitor fees (to be confirmed at time of application). Yesterday they asked for another £600 for the RICS survey which, as they have taken 2 weeks longer than they originally anticipated to find a surveyor in my area which impacts on the time that I can market the property, I paid.

I've asked them by email twice in the last 2 weeks, for a full list of expected costs for the lease extension and sale, but no one responds. I'm really worried about the additional costs getting me into debt, as without the information, I'm ill equipped to budget for the unlisted extras.

Does anyone know what I should be looking at as far as costs and time frame?

Thanks in advance

Also Jules, why did you wait till 79 years to extend and not do it at 80 year mark? was this just because you didnt want to sell your house etc until now?

eddddy

sofsofsof wrote: »

They said to me on the phone they dont have to grant us it and that if they do they wont look at it till at 80years so sounds ok in that respect,i think all leases can be [STRIKE]renewed[/STRIKE] extended at 80 years tho regardless?

There is no statutory right to extend a shared ownership lease. (Not at 80 years unexpired, or at any other time).

Your HA may have a policy of allowing leases to be extended when they have 80 years unexpired - but that would be their choice. It's not a statutory requirement.

(But it could be that you and they have signed a legal agreement, saying that you can extend the lease when it reaches 80 years uexpired.)



However, if you own 100% of the lease, you have the statutory right to extend the lease at any time you choose.

Jules0606

Hi,

I'm so sorry, I can't find a way to reply to your message, it says you don't allow private messages.

So far, our Lease extension with Guinness started on 06/01/19. They's taken over a month to find a RICS valuer and I still haven't been given a time for the valuation yet!! But we have been charged £600 at the end of Jan so far to cover the fee, which I wasn't made aware of.

So far Guinness have quoted potentially £6000 for the premium, but I've also been told £3000 by another employee, so I'm completely at their mercy at the moment.
I started the sale on 16/01, and for the money they've charged us, they still haven't looked for a buyer. I get to list the house with an estate agent from 28/02.

If you want any updates, let me know, but good luck. I'm mortified that a charity is allowed to act this way.

Take care

Jules