Advice needed - Lease extension on leasehold flat

yya

Hi everyone, I hope I could have some advice for lease extension issues. I am in the process of buying a purpose built flat in London. The flat has 103 year lease remaining. I want to extend the lease but the current owner does not want to extend before the sale.

Based on my research, the gov gave leaseholders the right to extend the lease after owning the flat for 2 years. I would like to ask, if I own the flat for 2 years, and ask for lease extension, would the freeholder legally has to agree? Or there might be a situation that the lease cannot be extended even if I have owned the flat for more than 2 years?

Thanks in advance!

NameUnavailable

Yes, you have a legal right to extend your lease (subject to a few exceptions, shared ownership property being one) after 2 years ownership, and you should do this via the formal route, not by negotiating with your freeholder.

The other option is you as the vendor to start the formal process now and you take it over when you complete (so you would pay the costs for the lease extension but don't need to wait the 2 years).

Jonboy_1984

This is a very good place to start your research https://www.lease-advice.org/advice/find-the-right-information-for-you/?step-option=65

With that long a lease now I would make sure you are looking at statutory terms (90 year extension, almost no changes to lease terms, and peppercorn ground rent). It is below 80 years that marriage value kicks in and makes it very expensive.

Be aware that if you buy with a mortgage the mortgage company would need to approve any informal extension agreement, because they often involve changes to the lease terms and they need to make sure it doesn’t impact their security.

eddddy

yya said:

I would like to ask, if I own the flat for 2 years, and ask for lease extension, would the freeholder legally has to agree? Or there might be a situation that the lease cannot be extended even if I have owned the flat for more than 2 years?

After owning the flat for 2 years you can almost always do a 'statutory lease extension' - that means you have the legal right to extend your lease, and the freeholder cannot stop you.

There are a few exceptions  - like if your freeholder is a Charitable Housing Trust.
See: https://www.lease-advice.org/advice-guide/lease-extension-getting-started/

As long as you follow the strict process precisely (usually with the help of a solicitor and valuer), you should get the lease extension.


There is also an 'informal route' to getting a lease extension. This just means you try to negotiate a deal with the freeholder. There are no rules. For example, you don't have to wait 2 years. You can offer any amount of money you like, the freeholder can ask for any amount of money they like.  It's a bit like negotiating to buy a used car.

But some 'nasty' freeholders will try to rip-off leaseholders - so it's often still sensible to get a valuer and solicitor involved.