Lease extension when share of freehold

EimearHowley

Hello,

I have share of freehold with x2 other flats in a converted Victorian property split into x3 flats.
Our flat had the lease extended to 999 years by a previous owner in 2007.
One of the other flats is now selling and say their lease is only 80 years and would like to get an extension. She has asked if we are ok to cover a 1/3 of the costs of the solicitors. 

Questions:
1.  Is this normal that individual freeholders have different lease lengths? 

2. Are we entitled to share these costs with her or should she cover as it’s extending her lease?

Thanks! 

propertyrental

Yes normal if one or more leases was extended and one or more not extended.

When your lease was extended to 999, did the then owner pay the 3 freeholders for the advantages (increased value of lease) they (and now you) benefitted from? Your 999 lease is considerably more valuable than your neighbour's 80 year old lease.

If your leaseholder at the time paid the freeholders at the time for the extension, then of course your neighbour should now pay the freeholders (the 3 of you) for their extension.

Legal costs are relatively insignificant in comparison with the increased lease value, but should be paid by the leaseholder.

EimearHowley

Thank you very much. Apologies I’m not used to the leaseholder/freeholder terminology! 

We don’t have a leaseholder as we are all sharing a share of the freehold.
I’m not sure if there was a payment but I know the rent was the ‘one peppercorn’ term. 

EimearHowley

P.S I found this in the variation of lease document for which our lease was extended to 999 years. 

“ If at anytime in the future the other Flat Owners choose to extend their lease in accordance with the provisions of this lease then the Tenant for the time being of this Lease will raise no objection and will upon written request agree to sign any such deed if he is an officer of the Landlord to enable the relevant Flat Owner to extend their Lease in the same manner as this Lease“

Does the owner who wants to extend their lease still have to cover the solicitors fees in this case? 

Jonboy_1984

EimearHowley said:

Thank you very much. Apologies I’m not used to the leaseholder/freeholder terminology! 

We don’t have a leaseholder as we are all sharing a share of the freehold.
I’m not sure if there was a payment but I know the rent was the ‘one peppercorn’ term. 

If a premium was paid to the freeholder for your flats extension it will be detailed in the new lease.

propertyrental

EimearHowley said:

Thank you very much. Apologies I’m not used to the leaseholder/freeholder terminology! 

We don’t have a leaseholder as we are all sharing a share of the freehold.
I’m not sure if there was a payment but I know the rent was the ‘one peppercorn’ term. 

Your building will have 4 Titles. If you go to the Land Registry website here you will see them listed, and for £3 each can download the Title documents

1 Freehold, jointly owned by all 3 of you (hence your 'share of freehold').
2 a Lease for the top flat
3 a lease for the middle flat
4 a lease for the ground floor flat

(assuming there is one flat on each floor).

The 'peppercorn' is the ground rent each leaseholder has to pay the freeholder each year. In practice it's not worth the leaseholders paying this, and not worth the freeholder demanding it.

You own 1 of the leases (length 999 years) and your 2 neighbours own the other 2 (one of which is a lease for 80 years)

fisher66

Why would you pay solicitors to extend the other party's lease if there is no advantage to you? What would you gain by paying? I would just say no.

EimearHowley

Jonboy_1984 said:

EimearHowley said:

Thank you very much. Apologies I’m not used to the leaseholder/freeholder terminology! 

We don’t have a leaseholder as we are all sharing a share of the freehold.
I’m not sure if there was a payment but I know the rent was the ‘one peppercorn’ term. 

If a premium was paid to the freeholder for your flats extension it will be detailed in the new lease.

Thank you! I have looked at the new lease and it says Nil beside premium so there was no premium paid. Thank you I didn’t know what to look for before! 

EimearHowley

Thank you all for your advice and help! 

propertyrental

EimearHowley said:

P.S I found this in the variation of lease document for which our lease was extended to 999 years. 

“ If at anytime in the future the other Flat Owners choose to extend their lease in accordance with the provisions of this lease then the Tenant for the time being of this Lease will raise no objection and will upon written request agree to sign any such deed if he is an officer of the Landlord to enable the relevant Flat Owner to extend their Lease in the same manner as this Lease“

Does the owner who wants to extend their lease still have to cover the solicitors fees in this case? 

OK so the other 2 joint freeholders presumably agreed to the 999 year extension of your flat without charge on the proviso that they too could extend their leases without charge in the future.

But I believe the leaseholder should pay the legal costs (unless the cost was shared by the 3 freeholders when yout lease was extended).

JM68

Seems as part of agreeing to your lease extension the clause was put in so you can not object to the others doing so, and seems to infer you can't ask for any premium to be paid (which seems fair if you did not pay a premium for yours).

But, as propertyrental says, it is normally the leaseholder who pays the costs.  And normally those costs would be their own legal costs AND the reasonable legal costs of the freeholder.

On that subject, are the freeholders proposing to instruct their own solicitor to act for them? Normally one solicitor could act for all if all the freeholders and leaseholders were extending together, but that is not the case here.

For example, what is to stop the leaseholder that is now extending putting clauses into the new lease/deed of variation that have an adverse impact on either the value of the freehold or the current terms/value of your own lease?