Challenging sale - no more advice required

Thrugelmir

Is your mortgage lender happy with the remaining term of the lease as it stands? 

anselld

watermelonspring said:

anselld said:

Why do you not want an extension and peppercorn rent?  Are they demanding an additional fee for this?
It is normal for share-of-freeholders to issue themselves long leases at zero ground rent without cost other than legal fees so why would you decline?

Ultimately, if you cannot see eye-to-eye with the other joint freeholder then you are asking for trouble in proceeding with the purchase anyway so the fact that you cannot proceed may be a blessing.

I am happy for a lease extension but it’s not clear on why this cannot wait. It’s going to delay the sale by several more weeks which we have not planned for. It is also the manner in which it was demanded with a threat to halt the sale if we don’t agree. 

You said in the first post that the extension was offered at the start, which would not have introduced delay.  You haven't explained why you turned it down.

watermelonspring

Thrugelmir said:

Is your mortgage lender happy with the remaining term of the lease as it stands? 

Yes they are happy 

watermelonspring

anselld said:

watermelonspring said:

anselld said:

Why do you not want an extension and peppercorn rent?  Are they demanding an additional fee for this?
It is normal for share-of-freeholders to issue themselves long leases at zero ground rent without cost other than legal fees so why would you decline?

Ultimately, if you cannot see eye-to-eye with the other joint freeholder then you are asking for trouble in proceeding with the purchase anyway so the fact that you cannot proceed may be a blessing.

I am happy for a lease extension but it’s not clear on why this cannot wait. It’s going to delay the sale by several more weeks which we have not planned for. It is also the manner in which it was demanded with a threat to halt the sale if we don’t agree. 

You said in the first post that the extension was offered at the start, which would not have introduced delay.  You haven't explained why you turned it down.

Right at the very start of the sale, after we made an offer, we were offered a lease extension. The seller asked briefly if I wanted a lease extension. It wasn’t recommended and no reason was given etc. As first time buyers, I didn’t see a need (I have explained why above), I declined and it was fine. Our lawyers and mortgage broker did not advise differently. I am happy to extend the lease later. I do think it’s a bit different when you’re right at the end of the sale and someone comes along and threatens to stop the sale if you don’t extend the lease. Had the person told me this months ago, I would have agreed but not at the last moment. I wonder why it can’t wait?

bouicca21

Have you read the existing lease? That might give you a clue about why someone thinks it needs changing.  Have you spoken to your vendor - as a co-freeholder they must be involved in discussions about changing the lease.  

watermelonspring

bouicca21 said:

Have you read the existing lease? That might give you a clue about why someone thinks it needs changing.  Have you spoken to your vendor - as a co-freeholder they must be involved in discussions about changing the lease.  

I’ve read the lease. A lot of legal terms but all looks standard according to my legal team. The vendor isn’t really saying much at all on this, just leaving us to sort it out with the other freeholder. The freeholder wants to create a new lease and we are to approve it or pull out. 

hazyjo

Putting it bluntly, most people buying leasehold with less than 85 years remaining will want an extension. Your lender or whoever may have said it's a problem with 70 years left, but that's as it'll likely be completely unmortgageable for most people by that time.

Yes, you should 100% have had the lease extended.

greatcrested

In principle, as others have said, it makes sense to have the lease extended, to remove the ground rent, and to remove 'archaic clauses'.

Howevere the devil is of course in the detail:

* how long will the new lease be?

* there will there be a cost involved in creating the new lease- who will pay this? You or the seller?

* what are the 'archaic clauses' being removed? What new clauses (if ay) will be substituted?

Without kowing the above you cannot be expected to agree.

And given that you and this other freeholder will have to work together to manage the building going forward, the current relationship does not bode wellfor the future.

Unless you get clear answers from the freeholder, and cooperation regarding the form, I would walk away, relieved to have escaped a potentially problematic shared freehold set-up. Let your seller sort things out and then sell with a new lease in place. Meanwhile find yourself somewhere less troublesome.

bouicca21

Could you clarify?  Is this a two stage process - step 1 agree to new lease in principle, step 2 discuss and digest contents?

As others have said it makes sense to extend an 85 year lease and to get rid of ground rent.  What else is on the table?  

watermelonspring

greatcrested said:

In principle, as others have said, it makes sense to have the lease extended, to remove the ground rent, and to remove 'archaic clauses'.

Howevere the devil is of course in the detail:

* how long will the new lease be?

* there will there be a cost involved in creating the new lease- who will pay this? You or the seller?

* what are the 'archaic clauses' being removed? What new clauses (if ay) will be substituted?

Without kowing the above you cannot be expected to agree.

And given that you and this other freeholder will have to work together to manage the building going forward, the current relationship does not bode wellfor the future.

Unless you get clear answers from the freeholder, and cooperation regarding the form, I would walk away, relieved to have escaped a potentially problematic shared freehold set-up. Let your seller sort things out and then sell with a new lease in place. Meanwhile find yourself somewhere less troublesome.

Thank you. I really think you’ve understood what my concerns are. The freeholder wants to add new terms but won’t say what they are or if they are up for negotiation. I can’t get any of the info you have mentioned either.