Leasehold

paulk73

I live (mortgaged) in a terraced first floor flat, which has a leasehold remaining of 57 years.

The gentlemen than owns the downstairs flat, is the freeholder. He has asked me to renew the lease on my upstairs flat, as he has the property (downstairs freehold) up for sale and has advised that nobody can get a mortgage due to the leasehold on my property being down to 57 years.

He has advised that it would cost me around £8,000, to renew the leasehold, money which I just don’t have. As he is wanting to sell, he has said he is prepared to pay to have the leasehold extended, but I would need to pay the legal costs, believed to be around £2,000.

It seems strange that he would be willing to pay for the renewal on my lease, is this something that could be done?

Are you able to offer any help or guidance as I really have no idea what I can do, or if I can be forced to do anything.

Mark_d

A lease is an agreement between the leaseholder (you) and the freeholder (the gentleman downstairs).  Clearly the setup of the building changes if the lease was to expire.
I don't understand where the costs you quote have come from. I don't believe the freeholder can require you to extend the lease.  If he wants the extension then he should pay for it in full.

eddddy

paulk73 said:

The gentlemen than owns the downstairs flat, is the freeholder. He has asked me to renew the lease on my upstairs flat, as he has the property (downstairs freehold) up for sale and has advised that nobody can get a mortgage due to the leasehold on my property being down to 57 years.

I think the gentleman downstairs is confused - unless there is some other important information which you haven't mentioned.

Your 57 year lease will increase the value of his freehold.

Extending your lease will have the following 2 effects:

• 1) It will increase the value of your flat
• 2) it will decrease the value of your neighbour's freehold

Do you know who's been advising your neighbour on this?

TBH, I'd tear his arm off to get the lease extension for free - just paying £2k legal costs. But you should also hire your own solicitor. 

But I guess the risk is that once the process starts, your neighbour's solicitor might tell your neighbour that he's losing money on this deal, and so your neighbour might change his mind.