Surrender of existing lease and regrant new lease

ahfat41

There is a clause that existing lease must be surrendered and new one granted.  My understanding is when the lease reaches below 90 it is time to think about extending.  According to this lease it must be surrendered and a new one granted.  This means if there is 80 yrs remaining on the lease I will lose it and get a new one for 125 yrs.  I thought it would be 80 yrs + 125 yrs.  Rising ground rent starts at £200 and rising up to £1600 during the 125 yrs term.  Flat in London.  Is the common?  Thanks

eddddy

I'm not sure what you're reading, but there are 2 ways of extending a lease...

• If you get a statutory lease extension... it will add 90 years to the length of the lease (and reduce the ground rent to zero)

• If you informally negotiate a lease extension with the freeholder... there are no set rules. You can add any amount of time to the lease - as long as you both agree. Any other terms can be changed in the lease - as long as you both agree.

Here's some introductory info: https://www.lease-advice.org/article/lease-extension-of-leasehold-flats-the-two-routes/

user1977

Why do you think a surrender means you get nothing in return? You're not necessarily "losing" anything. 

ahfat41

eddddy said:

I'm not sure what you're reading, but there are 2 ways of extending a lease...

• If you get a statutory lease extension... it will add 90 years to the length of the lease (and reduce the ground rent to zero)

• If you informally negotiate a lease extension with the freeholder... there are no set rules. You can add any amount of time to the lease - as long as you both agree. Any other terms can be changed in the lease - as long as you both agree.

Here's some introductory info: https://www.lease-advice.org/article/lease-extension-of-leasehold-flats-the-two-routes/

eddddy said:

I'm not sure what you're reading, but there are 2 ways of extending a lease...

• If you get a statutory lease extension... it will add 90 years to the length of the lease (and reduce the ground rent to zero)

• If you informally negotiate a lease extension with the freeholder... there are no set rules. You can add any amount of time to the lease - as long as you both agree. Any other terms can be changed in the lease - as long as you both agree.

Here's some introductory info: https://www.lease-advice.org/article/lease-extension-of-leasehold-flats-the-two-routes/

There is a clause in the lease.  The lessor and lessee have agreed that the lessee will surrender existing lease to the lesser.  The lessee will accept a new lease.  Is this a good thing?  At what stage do you surrender the lease?  Thats what I wanted to know.  I would prefer the extending route.  I am new to this and want to make sure I understand the lease and how expensive it will be when time to surrender?  I think these are the queries I need to ask my solicitor but I thought may be some of you have been in that situation.  Thanks

AdrianC

What is the PRECISE wording of this clause?

SDLT_Geek

ahfat41 said:

eddddy said:

I'm not sure what you're reading, but there are 2 ways of extending a lease...

• If you get a statutory lease extension... it will add 90 years to the length of the lease (and reduce the ground rent to zero)

• If you informally negotiate a lease extension with the freeholder... there are no set rules. You can add any amount of time to the lease - as long as you both agree. Any other terms can be changed in the lease - as long as you both agree.

Here's some introductory info: https://www.lease-advice.org/article/lease-extension-of-leasehold-flats-the-two-routes/

eddddy said:

I'm not sure what you're reading, but there are 2 ways of extending a lease...

• If you get a statutory lease extension... it will add 90 years to the length of the lease (and reduce the ground rent to zero)

• If you informally negotiate a lease extension with the freeholder... there are no set rules. You can add any amount of time to the lease - as long as you both agree. Any other terms can be changed in the lease - as long as you both agree.

Here's some introductory info: https://www.lease-advice.org/article/lease-extension-of-leasehold-flats-the-two-routes/

There is a clause in the lease.  The lessor and lessee have agreed that the lessee will surrender existing lease to the lesser.  The lessee will accept a new lease.  Is this a good thing?  At what stage do you surrender the lease?  Thats what I wanted to know.  I would prefer the extending route.  I am new to this and want to make sure I understand the lease and how expensive it will be when time to surrender?  I think these are the queries I need to ask my solicitor but I thought may be some of you have been in that situation.  Thanks

My best guess is that the lease you are reading is the new extended lease and the clause you are reading is explaining that it was being granted to replace an older lease.

user1977

SDLT_Geek said:

ahfat41 said:

eddddy said:

I'm not sure what you're reading, but there are 2 ways of extending a lease...

• If you get a statutory lease extension... it will add 90 years to the length of the lease (and reduce the ground rent to zero)

• If you informally negotiate a lease extension with the freeholder... there are no set rules. You can add any amount of time to the lease - as long as you both agree. Any other terms can be changed in the lease - as long as you both agree.

Here's some introductory info: https://www.lease-advice.org/article/lease-extension-of-leasehold-flats-the-two-routes/

eddddy said:

I'm not sure what you're reading, but there are 2 ways of extending a lease...

• If you get a statutory lease extension... it will add 90 years to the length of the lease (and reduce the ground rent to zero)

• If you informally negotiate a lease extension with the freeholder... there are no set rules. You can add any amount of time to the lease - as long as you both agree. Any other terms can be changed in the lease - as long as you both agree.

Here's some introductory info: https://www.lease-advice.org/article/lease-extension-of-leasehold-flats-the-two-routes/

There is a clause in the lease.  The lessor and lessee have agreed that the lessee will surrender existing lease to the lesser.  The lessee will accept a new lease.  Is this a good thing?  At what stage do you surrender the lease?  Thats what I wanted to know.  I would prefer the extending route.  I am new to this and want to make sure I understand the lease and how expensive it will be when time to surrender?  I think these are the queries I need to ask my solicitor but I thought may be some of you have been in that situation.  Thanks

My best guess is that the lease you are reading is the new extended lease and the clause you are reading is explaining that it was being granted to replace an older lease.

Yes, it's the preamble explaining why the current lease was granted, nothing to do with something happening in the future. 

bouicca21

You don’t want to agree to a lease with ground rent rising to £1600.  You need some proper advice.

Brambling

It's been nearly 20 years since I extended a lease of a flat and then if a lease reach 65 years mortgage companies wouldn't lend on the flat.  Then it cost me £10000 to bring it back up to 99 years and that including paying for the freeholders solicitor fees. Ground rent went up from £30 a year to £300.  

Extending my least made it easier to sell and I got that money back, but the flats are still selling now with less then 45 years lease left but only to cash buyers who are buying at a low price especially for the SE.  I'm not sure on the cost to renew but last I heard it was £40k plus and the further away from 65 years the more expensive it gets.  

Renewing the lease does allow the freeholder to make changes to the least which is why you should get a solicitor 

Kyresa

I assume you're looking at buying a property and this is a clause in the lease you are looking to take over? 

If so then the existing tenant will "surrender" their current lease on the day of completion and the management company/Landlord will have already drafted a new lease that will be all agreed between you and will be dated (i.e. start) on the day you take over the tenancy.   The contract you exchange will be on the basis of the grant of the new lease.    

All perfectly normal, Only thing I'd be wary of is how long will the ground rent stay at £200 based on how long you would look to stay there!  

NameUnavailable

Brambling said:

It's been nearly 20 years since I extended a lease of a flat and then if a lease reach 65 years mortgage companies wouldn't lend on the flat.  Then it cost me £10000 to bring it back up to 99 years and that including paying for the freeholders solicitor fees. Ground rent went up from £30 a year to £300.  

Extending my least made it easier to sell and I got that money back, but the flats are still selling now with less then 45 years lease left but only to cash buyers who are buying at a low price especially for the SE.  I'm not sure on the cost to renew but last I heard it was £40k plus and the further away from 65 years the more expensive it gets.  

Renewing the lease does allow the freeholder to make changes to the least which is why you should get a solicitor 

Statutory lease extension adds 90 years to the existing lease and ground rent is reduced to peppercorn. Best to take that route rather than direct negotiation which almost always means still paying high ground rent.