Leasehold extension and purchase in Scotland vs UK

user1977

theredbull said:

It does seem ineffective, if not ironic, that the long lease act sought to effectively abolish residential leasehold properties in Scotland

No, it was only to abolish particularly long leases (which happened to comprise the vast majority of residential leaseholds).

_Penny_Dreadful

theredbull said:

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

What outcome are you seeking?

Have you approached your landlord about negotiating a voluntary acquisition of the reversion?  Your post makes it sound like you're worrying that you landlord could refuse to sell their reversion, which is true, but not that they have refused to sell.  

If you're worried about future financial risk I can't see that reaching an agreement to extend the lease would help.  I've bought and sold a few properties in Scotland and frankly I wouldn't touch a leasehold property when there's bound to be a non-leasehold alternative available.

What did the solicitors you've spoken with advise?  Did any of them check your lease for renewal rights or conversion clauses baked in?  If there were such a clause it could function like a perpetual interest.  Alternatively, did any of the solicitors examine the lease to see if it was "functionally" feu?

theredbull

User 1977, it was for leases over 175 years. Im not sure what you mean

Penny, no the solicitors only told me that I would have to seek the landlords permission which could be denied. They have not mentioned the clauses you suggest. Could you elborate?

The outcome I am seeking is to see what the best course of action to remedy the situation.

I am worried I will be forced to sell and be unable to.

user1977

theredbull said:

User 1977, it was for leases over 175 years. Im not sure what you mean

You said the aim of the Act was "to effectively abolish residential leasehold properties". It wasn't. Its purpose was to convert leases which had 175+ years remaining of their term (or 100+ years if residential) to ownership. It was made in the full knowledge that it wouldn't affect the tiny number of residential leases of a shorter remaining duration.

The outcome I am seeking is to see what the best course of action to remedy the situation.

Well, what remedy would you like? You can try to negotiate with the landlord to buy out their interest - that would then give you a "normal" property. You could try to negotiate an extension to the term - but as I said, that would still leave with the weirdness of a residential leasehold property, which I think would be difficult to market or mortgage.

Otherwise, what you've got is no different to what you originally bought.

I'm not sure why you've been going around lots of different places for advice - is the advice differing at all? I don't see anything vague about the position you're in.

theredbull

I was advised when I.bought that the lease would not be an issue. Again, had recommendations been implemented etc. it would have converted 

I was not aware, until very recently the title had not converted.

Also, is it not the case that the long lease act reduced the number of leasehold properties ? Therefore,  relative to market, the property is different to what I have bought.

user1977

theredbull said:

Also, is it not the case that the long lease act reduced the number of leasehold properties ? Therefore,  relative to market, the property is different to what I have bought.

No, even if the ultra-long leases were still around, a, say, 80 year lease is significantly different from an 800 year one.

Unfortunately you are 13 years too late to lobby about the legislation, and like I said above, there's little chance of anyone doing further reform just to benefit you and the handful of other residential leaseholders.

theredbull

Thank you for clarification.

I should emphasise:

There was an attempt to ammend the legislation by my MSP during a ammendment to the housing bill 2025 in May.

The government stated at committee that there existed a statutory right for a tenant  to purchase their lease. Hence the ammendment was rejected.

 I believe the statement that there is a statutory route to purchase in Scotland to be incorrect, and this is the primary reason I am seeking  information in this forum.

Thanks

user1977

theredbull said:

I believe the statement that there is a statutory route to purchase in Scotland to be incorrect, and this is the primary reason I am seeking information in this forum.

I can confirm it is incorrect.

_Penny_Dreadful

theredbull said:

User 1977, it was for leases over 175 years. Im not sure what you mean

Penny, no the solicitors only told me that I would have to seek the landlords permission which could be denied. They have not mentioned the clauses you suggest. Could you elborate?

The outcome I am seeking is to see what the best course of action to remedy the situation.

I am worried I will be forced to sell and be unable to.

Has any solicitor you’ve spoken to actually read your lease? 

Have you approached your landlord at all about purchasing their interest? 

theredbull

Hi Penny.

One solicitor has read, or so they said, and the other did not. Both stated that in order to convert I would have to approach landlord.

 They also both said there was no guarantee they would agree. They also stated there was no right to extend in Scotland. 

I have not approached as yet as I was hoping the ammendment would have passed.

I am also a full time carer for my disabled mother so we are extremely worried about the financial implications of the approach.