89yrs left on lease - owner offering to extend it. Catch?

bouicca21

Why fuss about it now?  Plenty of time to get the right to extend and sort it all out on your own terms rather than rely on the vendor.

eddddy

Tracet74 said:

Firstly, going down the non-statutory path means no deadlines are put into place so the freeholder could potentially drag their heels.  

Yes - the freeholder might drag their heels.

Or on the other hand, the freeholder might not drag their heels - in fact, the lease extension might get done more quickly. 

It's a consideration and something to look out for, but not a reason to avoid the informal (non-statutory) route.

For example, a leaseholder can decide that if the freeholder hasn't signed a contract within 8 weeks, they can start the statutory route. (Bearing in mind the risk of double valuation costs, etc)

Also, if a buyer wants a lease extension on completion, the informal / non-statutory route is the only viable option

Tracet74 said:

Also, I heard a conversation about how it could split the housing market having flats with a peppercorn ground rent, whether by being a new lease or having been extended, versus an identical flat WITH a ground rent, potentially thousands in London.  Would you rather get the same property with a peppercorn or a ground rent??

You seem to be assuming that a lease extended through the informal / non-statutory process wouldn't have a peppercorn ground rent.

In reality, the ground rent would be whatever the leaseholder and freeholder agree on.

I know many leaseholders who have negotiated peppercorn ground rents with informal / non-statutory lease extensions.

Oasis1

bouicca21 said:

Why fuss about it now?  Plenty of time to get the right to extend and sort it all out on your own terms rather than rely on the vendor.

It's taking on the risk of it being higher costs than anticipated. And not being able to see the current terms (it's not on the title deed available from land resistry - I've checked)

eddddy

Oasis1 said:

bouicca21 said:

Why fuss about it now?  Plenty of time to get the right to extend and sort it all out on your own terms rather than rely on the vendor.

It's taking on the risk of it being higher costs than anticipated. And not being able to see the current terms (it's not on the title deed available from land resistry - I've checked)

The current ground rent terms will be in the lease.

If the estate agent is doing their job properly, they should be able to tell you what the ground rent terms are.

And your solicitor will confirm everything during the conveyancing process.



The freeholder might quote a price for a lease extension - but it might (or might not) be stupidly high. For example, it might be double what it should be.

In that case, you'd be better off going for a statutory lease extension.