Lease extension on share of freehold - Struggling to find solicitor

VT41

I own a share of the freehold for my Flat. There are three other freeholder within the management company. We all own an equal share and have decided amongst ourselves to collectively extend all of the leases of our flats to 999 for a nill premium.

As a result, we won’t pay an excess and the paperwork should be relatively straightforward with it being a surrender and regrant of lease . I’m struggling to find a solicitor that will deal on behalf of all of us even if we provide written agreement/consent.

They all want to act individually for all of the various freeholders and subsequently will charge separately

Does anyone have any advice on finding solicitors that would deal for all of us and charge one

poseidon1

You have a freehold reversion company that owns the freehold of the property separate and distinct from the underlying leases owned by each of you.

No solicitor will act for the Freehold company as well as the underlying leaseholders in this matter, even though you are are all shareholders and directors of the company.

The company is a separate legal entity from the 4 of you and has to be represented separately. In theory, I see no particular difficulty with a separate solicitor representing the 4 leaseholders, unless there is a significant variation in the length of each of your remaining leases.

You have not indicated the length of the current leases you wish to extinguish.

If you all have allowed your leases to diminish to such an extent that significant 'marriage value' has now accrued to the Freehold company, purporting to extinguish those leases and install very long leases at nil premium may have corporation tax implications on the Company based on the marriage value the company is deemed ( by HMRC) to have foregone. Some solicitors may be wary of handling this matter if no tax advice has been sought on behalf of the company.

eddddy

The problem is likely to be that there is a potential for conflicts of interest. As far as the solicitor is concerned, there are 9 parties involved:

• The company that owns the freehold
• The 4 directors/shareholders of that company
• The 4 leaseholders (who also happen to be the directors/shareholders mentioned above)

A solicitor is required to act in their client's best interest, but with 9 parties involved - what is in one party's best interests might not be in the other 8 parties' best interests.

One approach might be to specifically look for a solicitor to act on behalf of the Company only - and therefore only offer advice to the Company, and offer no advice to the directors / shareholders / leaseholders. (Assuming the 4 of you are happy to proceed without any legal representation.)

RiskAverse100

Another option is for one solicitor to act for the 4 leaseholders and for the freehold company to be unrepresented. As long as the 4 leaseholders have decided in advance that the only changes that are to be made to the leases are to extend the term to 999 years and reduce the ground rent to a peppercorn and nothing else, and clearly instruct the solicitor to act for them on this basis, then there is minimal risk of a conflict of interest arising.

It would in fact be essential for leaseholders to be represented if any of the flats are mortgaged as the lenders will insist on there being a solicitor acting for them to ensure that their security is not adversely affected. It is almost always possible in the case of most lenders for the same solicitor already acting for the leaseholder to act for the lender as well.

A Deed of Substituted Security will be needed. This transfers the mortgage from the existing lease to the extended lease. Ensuring that this is properly signed by all parties and registered at the Land Registry along with the lease extension deed is the main reason why a lender will want there to be a solicitor acting for them.

It should be clarified that, while it should be possible for one solicitor to act for all four leaseholders, they will need to be set up as separate clients if mortgages are involved and so the solicitor won't be acting for them collectively. This will undoubtedly increase the costs as each client will need a separate client care letter and there will be four separate matter files. However, the same basic lease extension deed can be used for all four flats.

While the Land Registry usually requires all parties to a transaction to be represented, it would be possible for the solicitor acting for the four leaseholders to confirm in the application form when the extension deeds are registered that they have verified the identity of the freehold company. This will be acceptable to the Land Registry. Relevant information can be downloaded from Companies House to be enable them to do so, and they will already have carried out ID checks on the directors/shareholders.

The Association of Leasehold Enfranchisement Practitioners specialise in lease extensions and so it should be possible to find a solicitor from the search facility on their website: https://www.alep.org.uk