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Buyer suddenly wants us to serve S42 - Leasehold flat sale
x_malibubabe
Posts: 37 Forumite
Hi all, I wondered if anyone is clued up on lease extensions/selling a flat with a low lease? We are selling our leasehold flat, no onward chain as we're breaking it and moving with the mother in law until we find somewhere we want to buy. We accepted an offer 10k below the asking price because the lease is low (73 years) and the buyers were cash buyers who plan on renting it out. They knew the lease was low and that we had no plans to extend it, we were selling as is and their offer was accepted based on the low lease/cash buy.
Four weeks in and I get a phone call from the agent because the buyers' solicitor has put the fear of god up them and told them it 'might' cost 5k more to extend in 2 years so they (buyers) are now panicking that it's going to cost them a few grand and have asked us to start the extension process for them (it's clear they are first time landlords). The trouble with this is that we haven't owned the property for 2 years until 12th April and we had intended to complete by this date without bothering getting the lease extended. We haven't actually agreed to extend it, but we also haven't said no because we fear we'll lose them as a buyer.
Our solicitor has now requested the costs but this can take up to 3 weeks to hear back from them. From what I can find on lease websites it's possible for us to serve a S42 notice on exchange, and assign the benefit of the s42 (I understand "assign the benefit" as "putting it in their names") on completion. Does anybody know how this works and how long a delay between exchange and completion we could have, or is it something that can be done relatively quickly because it's only the start of the process. Seller has agreed they would pay all costs including our legal costs for serving the notice. We wouldn't even start the process until exchange though and will have it written into our contracts that they are to pay any costs incurred by this extension.
Four weeks in and I get a phone call from the agent because the buyers' solicitor has put the fear of god up them and told them it 'might' cost 5k more to extend in 2 years so they (buyers) are now panicking that it's going to cost them a few grand and have asked us to start the extension process for them (it's clear they are first time landlords). The trouble with this is that we haven't owned the property for 2 years until 12th April and we had intended to complete by this date without bothering getting the lease extended. We haven't actually agreed to extend it, but we also haven't said no because we fear we'll lose them as a buyer.
Our solicitor has now requested the costs but this can take up to 3 weeks to hear back from them. From what I can find on lease websites it's possible for us to serve a S42 notice on exchange, and assign the benefit of the s42 (I understand "assign the benefit" as "putting it in their names") on completion. Does anybody know how this works and how long a delay between exchange and completion we could have, or is it something that can be done relatively quickly because it's only the start of the process. Seller has agreed they would pay all costs including our legal costs for serving the notice. We wouldn't even start the process until exchange though and will have it written into our contracts that they are to pay any costs incurred by this extension.
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Comments
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You can serve the s42 notice anytime before completion. e.g. You could serve the s42 on 12th April and complete on 13th April.
But your buyer might want a bit more of a gap, in case there are delays etc. And obviously, all the details would need to be agreed before exchange and written into the contract.1
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