Retirement Property Sale - Lease Extension

DE_612183

As part of the sale of my deceased MIL's flat, the Housing / Management company are insisting on a lease renewal.

They have indicated that the costs ( £500 ) for this should be shared by both the buyer and seller - I don't understand this as the benefits of the renewal are only for the Buyer.

Should we be contributing towards this? Is this usual?

theartfullodger

Surely the price increases as lease length goes up. (So I'd take it off market, extend lease, then put back in market).

But if freeholder  (surely rather than management company) is insisting then you have no choice?

ThisIsWeird

Without going into the detail of your situation, would it not be the case that the 'benefit' of a lease-extension is to both the seller and buyer, the former due to the increased (at least not reduced) value of their property, and the latter due to having a good long lease?

How long is your current lease? It's unlikely that anyone can force you to extend your lease, but the value of your property will continue to fall as the end of the lease approaches. 

It's £250 each?

DE_612183

The property was sold with the buyer knowing the state of the current lease, I think the terms of the lease impose conditions on the owner - such as payment towards a sinking fund if the property is sold in the future - we have to pay 1%, the new lease imposes a figure of 2%.

DE_612183

yes it's 250 each ( plus vat ) - not a huge sum, I was just questioning whether it's right or not - the split has been suggested by the HA - I was wondering whether they suggested this to placate the new buyer who has to agree to the 2% future payment...

eddddy

DE_612183 said:

As part of the sale of my deceased MIL's flat, the Housing / Management company are insisting on a lease renewal.

You mention a "lease renewal", others are mentioning a "lease extension".

Is it a lease extension, or is it a change to the terms of the lease - such as changing the the lease assignment charge from 1% to 2%?


You say that the HA is "insisting" on these changes - are you sure that they can force you to accept these changes, or would they simply   very much prefer you to accept these changes? (It seems unlikely that they can force you.)


Sometimes this type of change comes about because of something like this...

• According to the leases, the HA isn't responsible for repairs and maintenance of heating, hot water, plumbing, etc in the retirement flats - and you only pay a 1% assignment fee

• The HA want to change the leases to make the HA responsible for repairs and maintenance of heating, hot water, plumbing, etc in the retirement flats - so the assignment fee increases to 2%, to cover some of the extra costs

Is that the case for you?

If so, which option does your buyer prefer?

DE_612183

eddddy said:

DE_612183 said:

As part of the sale of my deceased MIL's flat, the Housing / Management company are insisting on a lease renewal.

You mention a "lease renewal", others are mentioning a "lease extension".

Is it a lease extension, or is it a change to the terms of the lease - such as changing the the lease assignment charge from 1% to 2%?


You say that the HA is "insisting" on these changes - are you sure that they can force you to accept these changes, or would they simply   very much prefer you to accept these changes? (It seems unlikely that they can force you.)


Sometimes this type of change comes about because of something like this...

• According to the leases, the HA isn't responsible for repairs and maintenance of heating, hot water, plumbing, etc in the retirement flats - and you only pay a 1% assignment fee

• The HA want to change the leases to make the HA responsible for repairs and maintenance of heating, hot water, plumbing, etc in the retirement flats - so the assignment fee increases to 2%, to cover some of the extra costs

Is that the case for you?

If so, which option does your buyer prefer?

Correct the HA want to change the terms of the lease and be responsible for more of the maintenance and at the same time increase the assignment fee.

The HA asked my MIL if she wanted to change a year or so ago, and she declined, however they are saying that for all new leaseholders they have to accept the new terms.

I don't the buyer thinks they have an option - I'm not sure if they do either.

However what I don't think is that we should be involved or pay any of the costs of the change to the lease for the occupier.

eddddy

DE_612183 said:

eddddy said:

DE_612183 said:

As part of the sale of my deceased MIL's flat, the Housing / Management company are insisting on a lease renewal.

You mention a "lease renewal", others are mentioning a "lease extension".

Is it a lease extension, or is it a change to the terms of the lease - such as changing the the lease assignment charge from 1% to 2%?


You say that the HA is "insisting" on these changes - are you sure that they can force you to accept these changes, or would they simply   very much prefer you to accept these changes? (It seems unlikely that they can force you.)


Sometimes this type of change comes about because of something like this...

• According to the leases, the HA isn't responsible for repairs and maintenance of heating, hot water, plumbing, etc in the retirement flats - and you only pay a 1% assignment fee

• The HA want to change the leases to make the HA responsible for repairs and maintenance of heating, hot water, plumbing, etc in the retirement flats - so the assignment fee increases to 2%, to cover some of the extra costs

Is that the case for you?

If so, which option does your buyer prefer?

Correct the HA want to change the terms of the lease and be responsible for more of the maintenance and at the same time increase the assignment fee.

The HA asked my MIL if she wanted to change a year or so ago, and she declined, however they are saying that for all new leaseholders they have to accept the new terms.

I don't the buyer thinks they have an option - I'm not sure if they do either.

However what I don't think is that we should be involved or pay any of the costs of the change to the lease for the occupier.

Ok - so it's just a question of who pays the £500 fee, and/or how it's split.

The short answer is that it's down to negotiation. 

The considerations are:

• If you refuse to pay £500 or £250 or whatever - will the buyer walk away?
• Or conversely, if the buyer refuses to pay £500 or £250 or whatever - will you walk away?

But I guess there could be a stand-off... where each person refuses to move forward until the other person agrees to pay. So then it's a case of waiting to see who gives in first.

DE_612183

eddddy said:

DE_612183 said:

eddddy said:

DE_612183 said:

As part of the sale of my deceased MIL's flat, the Housing / Management company are insisting on a lease renewal.

You mention a "lease renewal", others are mentioning a "lease extension".

Is it a lease extension, or is it a change to the terms of the lease - such as changing the the lease assignment charge from 1% to 2%?


You say that the HA is "insisting" on these changes - are you sure that they can force you to accept these changes, or would they simply   very much prefer you to accept these changes? (It seems unlikely that they can force you.)


Sometimes this type of change comes about because of something like this...

• According to the leases, the HA isn't responsible for repairs and maintenance of heating, hot water, plumbing, etc in the retirement flats - and you only pay a 1% assignment fee

• The HA want to change the leases to make the HA responsible for repairs and maintenance of heating, hot water, plumbing, etc in the retirement flats - so the assignment fee increases to 2%, to cover some of the extra costs

Is that the case for you?

If so, which option does your buyer prefer?

Correct the HA want to change the terms of the lease and be responsible for more of the maintenance and at the same time increase the assignment fee.

The HA asked my MIL if she wanted to change a year or so ago, and she declined, however they are saying that for all new leaseholders they have to accept the new terms.

I don't the buyer thinks they have an option - I'm not sure if they do either.

However what I don't think is that we should be involved or pay any of the costs of the change to the lease for the occupier.

Ok - so it's just a question of who pays the £500 fee, and/or how it's split.

The short answer is that it's down to negotiation. 

The considerations are:

• If you refuse to pay £500 or £250 or whatever - will the buyer walk away?
• Or conversely, if the buyer refuses to pay £500 or £250 or whatever - will you walk away?

But I guess there could be a stand-off... where each person refuses to move forward until the other person agrees to pay. So then it's a case of waiting to see who gives in first.

Yes, I get that - at the end of the day it's £500 or £250 if split - I'm no going to lose the sale over it - I was just wondering if anyone else had been in this position and what happened...