Lease extension

michymoo84

Hello all, sorry in advance for the long post but I am clueless and am hoping from some advice from you who are experts in the field or who have been through the process yourself. We own a 3 bed semi detached leashold house with 88 years left on the lease. We have owned the property for 5 years and are looking to move within the next 5 years. We have started the process of looking into extending the lease (on the basis that the longer we leave it, the more expensive it'll get and it could really decrease the value of our house - happy to stand corrected if I am wrong).

We pay £10 per annum ground rent to a company called ForHousing (who we believed were the freeholders). When we enquired about purchasing the freehold or extending the lease, we got this email back from them:

"ForHousing hold a 999 year lease from 29.09.1928 and therefore ForHousing could only sell this interest. We believe the freeholder of the land is Malcolm Corrie (TFM Corrie Trust) Leighton Estate, SY5 6RN. It should be noted that the freehold is not registered with the Land Registry".

Will the freehold not being registered with LR have an effect on us extending the lease?

An estimated breakdown of costs was also provided in terms of extending the lease with ForHousing: Valuation fees £500 + VAT, ForHousing legal fees £500 + VAT (in the region of) and then whatever we pay for our own legal costs (I did wonder if we could skip having our own solicitor but my gut is telling me that is not a good idea?).

I've used a lot of online calculators to give me an idea of how much we are likely to pay for the lease itself (FH were no help, just saying they will not have a price until a valuation has been done). Based on our information of 88 years left and approx valuation of £160k (via Zoopla), the calculators give an estimate of between £2100 (low) and £2500 (high). Are these calculators usually correct or shall I take those figures with a pinch of salt? Really trying to get an estimate of how much we are likely to pay in total. I'm guessing £1000 for our own legal costs. Does this sound about right?

Do any of you have any advice or recommendations for leasehold solicitors (preferably fixed price)?

princeofpounds

No, the freehold not being registered should not be a problem.

ForHousing are claiming to be an 'intermediate leaseholder'. So the structure of title on your property is freeholder -> ForHousing lease -> your lease.

From the point of view of a lease extension, this isn't a problem. Lease extensions are to be granted by the first 'competent landlord'. That would be the intermediate leaseholder if they have sufficient years left of the lease to do it, which they appear to. You would only go up to the real freeholder if the intermediate leaseholder did not qualify for some reason.

You may be able to negotiate an extension via an 'informal' process (it's not really informal as you would use a solicitor etc., it's just what it's often called). Or, you can ultimately rely on a statutory lease extension via a Tribunal. The threat of the latter means that sensible negotiations for the former are usually quite possible.

As for purchasing the freehold - ForHousing obviously can't sell it. They may still be prepared to sell their intermediate lease of course. That would make you the owner of a 900+ year lease (which is almost as good as a freehold in most respects, if not all) and remove your ground rent, and perhaps impose some other benefits and responsibilities.

And/or you can go and try purchasing the freehold itself. If they have awarded a 999 year sublease it's not going to be worth much. You may find that the entity that supposedly owns it isn't even functioning, or has lost proof of ownership. Then you get into issues of absent freeholders, being forced to use Tribunals etc. 

It may not be a very satisfactory experience to pursue the freehold - the lease extension is the most important thing for the saleability of your property in the timeframe you describe. But if you want it, you can explore that route.

The lease extension calculator is likely to be fairly accurate given you don't have e.g. an escalating ground rent, assuming the inputs you entered are correct.

IMO your estimates of legal costs may be slightly low, very definitely so if you need to go to Tribunal. But that depends on where you are in the country.

Re intermediate leaseholders read part 2.1: https://www.lease-advice.org/advice-guide/lease-extension-getting-started/

eddddy

I think there's some major confusion here.


You own a leasehold house, not a flat.  The law is completely different.

I suspect you have been looking at lease extension calculators for flats, and @princeofpounds has given you a link to info on lease extensions for flats.


A lease extension for a house is free (but you have to pay legal fees), it adds 50 years to the lease term - but your ground rent will increase substantially during those extra 50 years - perhaps into the thousands.

Here's some introductory info:   https://www.lease-advice.org/faq/i-cant-afford-to-buy-the-freehold-of-my-house-can-i-extend-my-lease-instead/

pieroabcd

How many times is it possible to claim the statury lease extension? only one off or every time that the lease is about to expire?