Leasehold extension and purchase in Scotland vs UK

theredbull

Dear MSE forum members.

I am a new user to this forum.
The following post is in no way a political discussion, merely an expression of a situation I find myself in due to legislation. 

I have an extremely worrying and complicated financial issue that I am unable to resolve. 

I have tried citizens advice, leasehold advisory service, which?, law clinics, the Scottish parliament and many, many lawyers.

I own a leasehold property in Scotland.

My property narrowly missed converting to outright ownership after the long lease act of 2012 was passed. Over an original 207-year lease, the property missed conversion to outright ownership by 6 years.

I am now in the extremely rare situation of possessing a leasehold property in Scotland.

From my research there maybe a few thousand others in a similar position, that they may not even be unaware of.....

I have noticed the suggestions on MSE about extending or purchasing the lease to a leasehold property in order to protect the property's future market value. My lease has 84 years remaining at this moment.

However, as my property is in Scotland, I have no statutory right to extend or purchase my lease. No way at all to implement the steps the MSE website suggests. This is despite the Scottish Government trying to abolish leasehold properties in Scotland by passing the long lease act of 2012. My property has fell through a bureaucratic 'crack'.

My landlord can refuse to sell or extend my lease in Scotland. This is contrary to English law, where I WOULD have the right to purchase or extend. This seems ironic.

I am really desperate to resolve my situation and this forum may be my last hope at trying to find a solution. It seems completely unfair that I have no right to buy or extend.

Please, please help, if anyone has insight in leasehold properties or the legalities of this?

 I am completely lost as to what to do. I feel leaving the situation (as is) will be too much of a future financial risk (when I come to sell in future).

I have also been advised that approaching my landlord in no way guarantees a positive outcome and may even make the matter more concerning to future potential buyers of my home (that is, if the lease is deemed not available to buy or extend by the landlord).

I also feel that the Scottish Government has discriminated against me by rendering my property a leasehold property arbitrarily. (Due to the 100-year remaining length rule in the 2012 long lease act, a six-year shortfall in my case). I also do not have the same rights as a leaseholder in England or Wales.

I don't know where else to turn.

I feel the issue is overwhelmingly complex and totally, totally unreasonable.

Thank you in advance for any replies.

Steve

user1977

I presume the property is a residential one?

Given how unusual that is in Scotland, what advice did you get at the time you acquired it? It's correct that you do not have a right to extend the lease, but you never have (and even if you could extend it, it's still going to be a weird outlier).

The (very) long leases which have been converted to freehold were typically quasi-freehold ones anyway, of 900+ years duration and minimal rights to the landlords (many of whom had long disappeared). I don't think it's entirely arbitrary of parliament to consider 80-ish year leases as being somewhat different.

theredbull

Hi user 1977

Thanks for your reply.

I was told by my conveyancing lawyer in 2006, at purchase, that the Scottish Government were seeking to abolish leasehold in Scotland. The lease had 103 years left at the time. It was agreed in 1907.

I took his advice although there is no written record of his advice. He was the head of the law society at the time, so I believed him.

The Scottish Law Comission recommended in a report into long leases in 2006 that leases that were over 175 in duration and had more than 100 years remaining  should be converted into outright ownership. My lease was 207 years in initial duration.

The Scottish Government passed legislation in 2012 to apply the recommendations of the SLC but the appointed day was set to occur in 2015.

Had the recommendations been implemented at the time of the SLC recommendations in 2006, my lease would have converted. In 2006 103 years remained on my lease. In 2015, 94 years remained. Hence, no conversion.

I take your point about an outlier but at least in English law, in extending, it would kick the can down the road for a potential buyer for a few hundred years.

Also, my landlord could refuse to sell, despite me being resident for more than 20 years. I don't belive this is the case in England where I believe I would be entitled to buy the lease.

theredbull

Yes, the property is residential 

SiliconChip

Have you raised the issue with your MSP? It all sounds a bit esoteric (I owned 4 properties in Scotland between 1997 and 2014 and I've never heard of residential leasehold there) so they may be unaware of the situation, and if informed perhaps they could undertake to do something about it.

theredbull

Yes I have contacted my MSP, 3 in all.

One bravely decided to try to lodge an ammendment to the 2012 legislation during a consultation on the 2025 housing bill.

It was rejected as the cabinet secretary believed I was legally entitled to purchase the lease. I am not in Scotland, as I would be under English law. (I believe).

I am lodging a formal complaint about their lack of knowledge about the law. Unless the many lawyers I have consulted here in Scotland are incorrect.

Without descending into a political discussion, the matter was raised as part of the housing bill 2025 but an ammendment to lower the years remaining was rejected by the aforementioned secretary.

I wonder if anyone with knowledge of a tenants right to purchase their lease in England can confirm what I have been told about that being a statutory right?
Or even the ability to extend.

MyRealNameToo

I dont think it "fell between the cracks", the Scottish parliament made an active decision to decide that residential properties had to have 100 years left on the lease and non-residential properties at least 175 years left. There are some other exclusions too like if the property includes a harbour or if rent was over £100/year 

Unfortunately can't help much as wasnt aware that any leasehold properties even existed in the residential space in Scotland.  Not even sure what "help" you want? The law is ultimately the law and whilst they advised it was likely there would be a change in law when you bought it there was an inherent risk that the law may not pass or may not pass in its current draft form. 

theredbull

I appreciate that, however the recommendations took 9 years to implement.

The law is the law.

But this seems discriminatory between English and Scots law.

sheramber

theredbull said:

I appreciate that, however the recommendations took 9 years to implement.

The law is the law.

But this seems discriminatory between English and Scots law.

I don’t think it is defined in law that there must be no difference between UK law and Scottish LAw. 

Scotland makes  its own decision,

Income tax is discriminatory  as well. Scotland has its own tax rates.

NHS Scotland is different from NHS in  England . 

user1977

sheramber said:

theredbull said:

I appreciate that, however the recommendations took 9 years to implement.

The law is the law.

But this seems discriminatory between English and Scots law.

I don’t think it is defined in law that there must be no difference between UK law and Scottish LAw. 

Scotland makes  its own decision,

Indeed, the Acts of Union preserved Scotland and England having independent laws in relation to property - there's never been a principle that they should be aligned, so not sure where you're getting that from, OP?

If you have a look at the Scottish Law Commission report on the Conversion of Long Leases, in particular para 2.14 you'll see them discussing the spread of term durations of leases - if yours was 207 years long then you'll see they found only 21 leases in the Land Register with an original term between 175-299 years. There would probably have been some which were not yet registered, but even so you can see it's an incredibly niche type of property interest. I doubt there's likely to be any special law reform to amend this area.