Freehold site on flat site being sold how does it affect the flat owner?

eddddy

Sirlaughalot said:

On a more general note regarding the short lease would it be best to get renew it now or wait till the law is changed?

Under the current law, the cost of a lease extension is the total of 3 things:

• 'Compensation to the freeholder for lost ground rent' + 'Compensation to the freeholder for reduction in the freehold value' + '50% of the marriage value'

The planned new law changes it from 3 things to just 2 things:

• 'Compensation to the freeholder for lost ground rent' + 'Compensation to the freeholder for reduction in the freehold value'
  
  

So '50% of the marriage value' is removed, which should make the lease extension cheaper.

But 'Compensation to the freeholder for lost ground rent' and 'Compensation to the freeholder for reduction in the freehold value' might both increase under the new law.

But even so, most people are expecting that extending a 37 year lease would still become cheaper.



BUT... a number of freeholders think it's unfair that the new law is effectively taking money away from them, and giving it to leaseholders.  They say it infringes their human rights.

So some freeholders are threatening to challenge the new law in court. At this stage, who knows if they really will go to court, and if they do, whether they would win?

But I guess a court case might delay the new law being introduced.