Lease extension on completion

Golfer1996

Hello,

I'd like to get some views from the forum on lease extensions during a sale and if anybody can provide guidance in this situation.

We're FTB, buying a share of freehold flat. The lease is short, fewer than 80 years, but the sellers are extending the lease to 999 years on completion.

I'd like to know what the risks are in doing this and if it could backfire. As far as we know the sellers are handling all costs, they have already had the extension approved and when we get the keys the lease will have changed to 999 years and will show up on the land registry.

We're concerned that the extension might not be completed by the time we buy the flat and then we'd have to pick up the costs.

We'd also like to know if we should be pushing for the sellers to get the extension done before the purchase and so that it shows up on the land registry now rather than at the point of sale.

user1977

It will be sorted out among the solicitors - in the same way that it's routine for buyers to "know" that the sellers are discharging their mortgages on completion, or that you're actually going to get title in exchange for your cash.

NameUnavailable

I don't understand why the lease wasn't extended when the shared freehold was set up. Maybe people just don't understand but then you'd think the solicitors should explain it to them. I've seen a lot of shared freehold flats with short leases.

As long as the vendors are covering all the costs there shouldn't be any issue. If it wasn't a shared freehold I would say to check that they aren't slipping in some onerous clause or high ground rent along with the extension but these shouldn't be relevant in this case.

eddddy

There's a list of things that a solicitor has to make sure happens on completion.

With the lease extension, it means there's a few extra things on that list. Your solicitor won't let you exchange contracts until all the correct preparation is done for everything on the list.

So there should be no problems with everything being done on completion.

If you want to be really paranoid, there are things that can go wrong on completion - but the lease extension is one of the least likely ones.


@NameUnavailable mentions some issues with lease extensions - but all those details will all be agreed on before you exchange contracts. None of those will suddenly 'pop-up' on completion, or after completion.

 

Edit to add...

But just to double check...

I'm assuming your solicitor is aware of the lease extension, and your solicitor has included it in the contracts, etc.

And it's not some kind of 'side deal' that you're doing with the seller. i.e. You're buying the flat using a solicitor - but the seller is arranging a lease extension privately without your solicitor's involvement.

If it's the latter, that's potentially super-risky - and you should stop.