Remortgage stalled due to insufficient time left on a 99 year lease - how to extend the lease?

ripofflondon

NB:  am posting in HBR&S on the advice of 1 of the people in a different sub-forum where I have already posted re this issue  (https://forums.moneysavingexpert.com/discussion/6515988/remortgage-stalled-due-to-insufficient-time-left-on-a-99-year-lease-how-to-extend-the-lease/p1?new=1) so didn't want anyone wasting their time on responses that have already been posted 

Hi all

This may well be thought of as more of a legal / land ownership issue than a mortgage one but, unless I am looking in the wrong place, there doesn't appear to be anywhere that quite fits it on MSE (unless anyone has any better ideas).

I am, or was till this AM, in the process of remortgaging my flat.  It is on the ground floor of a house that was split into 2 flats in 1988.  In the normal English way, each flat was sold on a 99 year lease and the upstairs leaseholder and me each continued paying £1/year ground rent to Mr X the freeholder (and owner of the house who'd split it into 2).  Then in about 2014/15, the upstairs leaseholder and me paid Mr X £20,000 for the freehold which we now own jointly, and since then we obviously haven't paid each other any ground rent.  

Now the prospective new mortgage lendor has picked up that my 99 year lease now has 'only' 63 years left to run and, predictably, they have said this is too short a time remaining.  

My question:  how do I extend my lease?  Obviously the upstairs leaseholder isn't going to object to this, any more than I would if they wanted to extend their own (which sooner or later they will no doubt look to do).  My instincts tell me that if I were to simply cross out the words '99 years' on my lease and replace it with '999 years' then the mortgage lendor would find some reason why this was unacceptable, but the idea of paying £000s in legal fees for a solicitor to do this goes against the grain a bit really!  

Anyone have any thoughts?

Mark

eddddy

A deed of variation will be required to extend your lease - which will require a surrender and re-grant of your lease.

Your mortgage lender wont allow you to do this yourself, they'd insist you used a solicitor.  Your joint freeholder would have to sign the docs as well

(If there were other changes you wanted to make to your lease, and your joint freeholder agreed, you could make them at the same time.)

Normally, you and your neighbour would extend your leases to 999 years at the same time - so instead of you paying your neighbour £x for your lease extension, and your neighbour paying you £x for their lease extension - you just call it quits, and don't pay each other anything.


But your other thread makes it sound like your neighbour already extended their lease in 2015, so they don't need a lease extension now.

So your neighbour can legally 'force' you to pay for a 90 year lease extension (probably for a few thousand pounds), and legally refuse to let you extend your lease to 999 years.

But if you gave your neighbour a 'free' lease extension in 2015, hopefully they will be honorable and give you a 'free' lease extension now. (Is it the same neighbour as in 2015, or has ownership changed?)

ripofflondon

eddddy said:

But your other thread makes it sound like your neighbour already extended their lease in 2015, so they don't need a lease extension now.

Hi Eddy - cheers for response. 

The other thread actually says in my my last post that the neighbour's lease extension never happened in 2015 but suspect you didn't see that bit.  I spoke to the neighbour yesterday and she never went ahead with extending her own one subsequently either, so both of us are in the same boat and she is happy to join in with me in extending both our leases now.  

Still annoys me that those solicitors doing the freehold purchase in 2015 didn't advise us at the time to consider extending our leases at the same time because (like you and others have pointed out) it would have been easier and cheaper to do both at the same time and I suspect them knowing they should have done so was why they got so annoyed with me for pointing this out in 2017.  Unfortunately they are no longer in business for me to consider me taking any action against them and I would probably be out of time even if they were.  

So now - looks like the neighbour and me are going to have to bite the bullet.   

jrawle

At least you should only have to pay one set of legal fees, and if you are lucky, just one split between you and your neighbour. When I extended the lease on a flat I owned, I had to pay three sets of solicitors: the freeholder's, the management company's, plus my own. They charged £750+VAT each. The legal fees are a total rip-off, money for old rope. The freeholder's solicitor simply copy and pasted a document they had, and didn't even remember to change the address (it was for a property in a completely different part of the country). My solicitor also failed to spot it; I had to point it out myself! What was I paying them for, then?

GDB2222

ripofflondon said:

eddddy said:

But your other thread makes it sound like your neighbour already extended their lease in 2015, so they don't need a lease extension now.

Hi Eddy - cheers for response. 

The other thread actually says in my my last post that the neighbour's lease extension never happened in 2015 but suspect you didn't see that bit.  I spoke to the neighbour yesterday and she never went ahead with extending her own one subsequently either, so both of us are in the same boat and she is happy to join in with me in extending both our leases now.  

Still annoys me that those solicitors doing the freehold purchase in 2015 didn't advise us at the time to consider extending our leases at the same time because (like you and others have pointed out) it would have been easier and cheaper to do both at the same time and I suspect them knowing they should have done so was why they got so annoyed with me for pointing this out in 2017.  Unfortunately they are no longer in business for me to consider me taking any action against them and I would probably be out of time even if they were.  

So now - looks like the neighbour and me are going to have to bite the bullet.   

Yes, it is annoying that they didn’t suggest this. However, they had no obligation to go beyond the remit you gave them, which was just to buy the freehold. So, you could have given them a bad review, but you wouldn’t have succeeded in a claim against them.

ripofflondon

Thanks.  Lastly - can anyone recommend a good firm of sols for the lease extension?  It DOES appear from my emails with the previous sols that it's not just a case of swapping 99 years for 999.  I believe there are firms (often based in the North) that do conveyancing etc on a high-volume basis but not sure if they could do this sort of thing - any suggestions welcomed.  

eddddy

ripofflondon said:

Thanks.  Lastly - can anyone recommend a good firm of sols for the lease extension?  It DOES appear from my emails with the previous sols that it's not just a case of swapping 99 years for 999.  I believe there are firms (often based in the North) that do conveyancing etc on a high-volume basis but not sure if they could do this sort of thing - any suggestions welcomed.  

A lease extension isn't conveyancing - you definitely don't want a conveyancing solicitor.

These days, the relevant solicitors tend to just call themselves "Lease Extension Solicitors" - but more traditional solicitors might refer to themselves as "Landlord and Tenant Solicitors" (as this comes under Landlord and Tenant legislation).



Hopefully, if you and your neighbour are in full agreement about everything, and there will be no conflict of interest - one solicitor will agree to act for both/all parties.

But if there are likely to be disputes or conflicts of interest, you might end-up needing 3 solicitors:

• 1 solicitor to represent you as a leaseholder
• 1 solicitor to represent your neighbour as a leaseholder
• 1 solicitor to jointly represent both of you as joint freeholders

So when you contact a solicitor, ask them specifically whether they're happy to act on behalf of all parties.