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  • FIRST POST
    • MSE Jenny
    • By MSE Jenny 1st Mar 12, 2:18 PM
    • 1,235Posts
    • 3,567Thanks
    MSE Jenny
    Extend Your Lease guide discussion
    • #1
    • 1st Mar 12, 2:18 PM
    Extend Your Lease guide discussion 1st Mar 12 at 2:18 PM



    Hi all, we've written a new Extend Your Lease guide to help you extend at a fair price.

    How did you find the info? If you've done it, how did it go and do you have any other tips you'd add? How much value do you think it added to your property?

    Thanks
    for your help!


    MSE Jenny

    Last edited by MSE Jenny; 02-03-2012 at 11:59 AM.
Page 37
    • Jackson6
    • By Jackson6 17th Jan 19, 12:54 PM
    • 7 Posts
    • 1 Thanks
    Jackson6
    Hi all, I am really new to this but as you all seem so knowledgeable, I figured that I'd ask your opinions on this matter as I am a first time buyer.

    The flat is a shared ownership, housing association (HA) part owned flat (they are the freeholder). It is 1 of 4 in a converted terrace. It was on the market a few weeks back at 430,000 and has now been reduced to 400,000, to reflect the lease term. I would be purchasing 30% at 120,000.
    I have had a look on the land registry and see that the basement and top floor flats have had their leases extended to 100+ years. I can also see from the site that the flat that I wish to purchase as well as the 1st floor flat have 'option to purchase a percentage of the freehold' listed as a note. Which leads me to believe that the other two flats have already done this as this is not an option listed for them on the land registry site. So having said all this, I have several questions should I put in an offer.

    1. If it is the case that the other two neighbours have purchased a percentage of the freehold and I wish to extend my leasehold, will I have to go through them as well as the HA?

    2. Do you think that as they have deducted 30,000, it means that they might try and charge me this amount to extend the lease because that's what they believe it will cost?

    3. Do you all think that the amount deducted is a fair amount considering that I am only purchasing 30% for now?

    4. As I will only own 30%, will I be expected to pay 30% of the lease extension as the HA own the other 70%?

    5. Has anyone had anyone else had any dealings with extending leases when the freeholder is a HA and what was your experience?

    Any advice would be much appreciated, thanks in advance!
    Originally posted by OnceUponATime
    I extended my lease as a shared ownership leaseholder of a property I only owned a part-share of. I believe that it is up to individual Housing Associations' discretion as to whether to allow it or not, in cases where less than 100% is owned.

    I extended my lease because a neighbour in the same block told me he had had problems trying to sell at his desired price, because of what was perceived as a short lease. I was told that if the lease is 75 years or under, you will face problems in attaining the price you want.

    I spent something like £8k all told, it was a tortuous process (problems with the solicitor, plus it felt like I was throwing money down the lav), but my understanding is that this £8k outlay has increased the value (or rather, prevented a decrease in value) of around £40k.
    • ForzaFifer
    • By ForzaFifer 24th Jan 19, 7:51 PM
    • 54 Posts
    • 9 Thanks
    ForzaFifer
    How long does it take to renew the lease?
    Or is that a bit like, how long is a piece of string?

    I agreed to buy a flat back in December on the agreement that the seller renews the lease, which they agreed to. The estate agent told me its all in motion, but it seems to be taking ages. So, can anybody tell me how long it took them to renew theirs?

    cheers,
    • da_rule
    • By da_rule 24th Jan 19, 11:53 PM
    • 3,218 Posts
    • 2,904 Thanks
    da_rule
    Or is that a bit like, how long is a piece of string?

    I agreed to buy a flat back in December on the agreement that the seller renews the lease, which they agreed to. The estate agent told me its all in motion, but it seems to be taking ages. So, can anybody tell me how long it took them to renew theirs?

    cheers,
    Originally posted by ForzaFifer
    It can take up to a year, sometimes longer. It depends entirely if all the parties co-operate or if the Tribunal becomes involved etc (assuming your seller is going for the statutory option).

    If your seller is going for the statutory option, you donít have to wait for it to complete. The seller can assign the process to you and you can finish it off.
    • ForzaFifer
    • By ForzaFifer 25th Jan 19, 12:37 PM
    • 54 Posts
    • 9 Thanks
    ForzaFifer
    It can take up to a year, sometimes longer. It depends entirely if all the parties co-operate or if the Tribunal becomes involved etc (assuming your seller is going for the statutory option).

    If your seller is going for the statutory option, you donít have to wait for it to complete. The seller can assign the process to you and you can finish it off.
    Originally posted by da_rule
    A year? Thats crazy... I think he had already agreed the cost of the extension, so i just thought it would be done pretty quickly.

    Thats interesting, i didnt know about the statutory option. How does that work though? I would just move in whilst the seller pays for the extension? Sounds a bit dodgy.
    • eddddy
    • By eddddy 25th Jan 19, 12:56 PM
    • 7,811 Posts
    • 7,921 Thanks
    eddddy
    A year? Thats crazy... I think he had already agreed the cost of the extension, so i just thought it would be done pretty quickly.
    Originally posted by ForzaFifer
    So that sounds like an informal lease extension.

    So, in theory, that could be done instantly - it's just signing documents. (Just like, in theory, a house purchase can be done instantly - just by signing documents.)


    But in reality, the process might be more like this:
    • The freeholder, the current leaseholder and you agree terms of the lease extension
    • The freeholder's solicitor draws up a lease extension deed
    • The leaseholder's solicitor, your solicitor and you all check the deed
    • If there are no problems, you all agree to sign and exchange

    It's often agreeing the terms (e.g. arguing about the price) that takes the longest.


    Thats interesting, i didnt know about the statutory option. How does that work though? I would just move in whilst the seller pays for the extension?
    Originally posted by ForzaFifer
    Almost certainly not.

    You would have to estimate what the lease extension will cost, and reduce your offer price accordingly.

    You would then pay for the lease extension yourself.

    So if you are buying with a mortgage...
    • The flat has to be mortgageable with its current lease length
    • You will probably need enough cash (not mortgage borrowing) to pay for the lease extension
    Last edited by eddddy; 25-01-2019 at 4:42 PM.
    • ForzaFifer
    • By ForzaFifer 25th Jan 19, 3:16 PM
    • 54 Posts
    • 9 Thanks
    ForzaFifer
    Almost certainly not.

    You would have to estimate what the lease extension will cost, and reduce your offer price accordingly.

    You would then pay for the lease extension yourself.

    So if you are buying with a mortgage...
    The flat has to be mortgageable with its current lease length
    You will probably need enough cash (not mortgage borrowing) to pay for the lease extension
    Ok, i get it now. That wasnt really an option as the lease was down to 60 years, i agreed to buy it on the provision he extended the lease back to 125 years.

    I'll just have to wait i suppose, and maybe get in touch with the estate agent again.

    Cheers,
    • batg
    • By batg 25th Jan 19, 4:00 PM
    • 268 Posts
    • 461 Thanks
    batg
    Or is that a bit like, how long is a piece of string?

    I agreed to buy a flat back in December on the agreement that the seller renews the lease, which they agreed to. The estate agent told me its all in motion, but it seems to be taking ages. So, can anybody tell me how long it took them to renew theirs?

    cheers,
    Originally posted by ForzaFifer
    I am in the same situation, it's been going on since October.
    • eddddy
    • By eddddy 25th Jan 19, 4:45 PM
    • 7,811 Posts
    • 7,921 Thanks
    eddddy
    Ok, i get it now. That wasnt really an option as the lease was down to 60 years, i agreed to buy it on the provision he extended the lease back to 125 years.

    I'll just have to wait i suppose, and maybe get in touch with the estate agent again.

    Cheers,
    Originally posted by ForzaFifer
    Don't forget to check whether the ground rent will change - especially if it's an upward change.

    Some sneaky freeholders try to slip nasty ground rent terms into informal lease extensions.

    (Also find out if the freeholder is trying to change any other terms of the lease at the same time.)
    • eddddy
    • By eddddy 25th Jan 19, 4:55 PM
    • 7,811 Posts
    • 7,921 Thanks
    eddddy
    I am in the same situation, it's been going on since October.
    Originally posted by batg
    Depending on the exact circumstances, it can sometimes turn turn into a prolonged game of chicken - see who blinks first!
    • The freeholder knows the leaseholder needs a lease extension in order to sell the property...
    • ... so the freeholder asks for a 'stupidly-high' price for the lease extension.
    • The leaseholder says they won't pay that much. So unless the price comes down, they won't sell the flat, so they won't extend the lease, and so the freeholder won't get anything

    And it's a case of who gives in first!
    • batg
    • By batg 25th Jan 19, 10:32 PM
    • 268 Posts
    • 461 Thanks
    batg
    Depending on the exact circumstances, it can sometimes turn turn into a prolonged game of chicken - see who blinks first!
    • The freeholder knows the leaseholder needs a lease extension in order to sell the property...
    • ... so the freeholder asks for a 'stupidly-high' price for the lease extension.
    • The leaseholder says they won't pay that much. So unless the price comes down, they won't sell the flat, so they won't extend the lease, and so the freeholder won't get anything

    And it's a case of who gives in first!
    Originally posted by eddddy
    mine hasn't been like that at all.
    the freeholder said £750 and his legal fees so about £1250 and the people I am buying off have paid.
    Ground rent is £20 per year and that is staying the same.

    The hold-ups have been between the seller's solicitor, the freeholder's solicitor, the freeholder's mortgage company (whoever it was who took on Northern Rock), our solicitor etc...how they haven't moved into this century and stopped using snail mail I have no idea!
    • strawberries1
    • By strawberries1 1st Apr 19, 12:20 PM
    • 762 Posts
    • 149 Thanks
    strawberries1
    I've applied to the FTT. I'll appreciate suggestions re contesting the legal fees and the premium.


    I went with the fixed fee.

    The freeholder had proposed £18,867 (counter notice) as opposed to my £12,000 (S.42). After I presented him my surveyors calculations he's reduced it to £16,000.

    I've asked how much it will be if he retained some ground rent and he's offered £15,700 for retaining £30 GR.

    He says he'll reduce the premium by £1000- for every £100 in GR ie £15,000 for £100gr increasing by £100 every 25yrs.

    £14000 if £200 increasing by £100 every 25yrs

    £13,000 if £300 increasing by £100 every 25yrs.

    72yrs remaining, bought at £260,000 in July 2018 £30 GR.

    In 2013 a similar flat with 78yrs left paid £6000 to extend with GR at £250 doubling every 25yrs.

    Is this fair enough or shall I get my surveyor to negotiate further?

    Counter notice is dated 7th September. I have 6 months from that date to agree the premium right?
    Originally posted by strawberries1
    • keveen
    • By keveen 1st Apr 19, 9:26 PM
    • 127 Posts
    • 66 Thanks
    keveen
    Why haven't you gone down the formal route? The freeholder can run rings around you other wise and your groundent will be zero or peppercorn.
    https://www.lease-advice.org/article/lease-extension-of-leasehold-flats-the-two-routes/
    https://www.leaseholdknowledge.com/informal-lease-extensions-are-pure-poison
    https://www.moneysavingexpert.com/mortgages/extend-your-lease/
    Last edited by keveen; 01-04-2019 at 9:32 PM.
    Hi, weíve had to remove your signature. If youíre not sure why please read the forum rules or email the forum team if youíre still unsure - MSE ForumTeam
    • hencloud
    • By hencloud 29th Apr 19, 10:51 AM
    • 4 Posts
    • 1 Thanks
    hencloud
    formal route
    I would always recommend the formal route. There are so many traps and angles that unscrupulous freeholders can use. The formal route avoids all those problems and is a much cleaner and more efficient process.
    • eddddy
    • By eddddy 29th Apr 19, 11:12 AM
    • 7,811 Posts
    • 7,921 Thanks
    eddddy
    I would always recommend the formal route. There are so many traps and angles that unscrupulous freeholders can use. The formal route avoids all those problems and is a much cleaner and more efficient process.
    Originally posted by hencloud
    I'm not sure it's cleaner or more efficient to take the statutory/ formal route.

    It often takes 6 to 18 months to complete, and the leaseholder might have to pay £2k to £4k in fees.

    If you can informally negotiate a fair deal with your freeholder, it's likely to be quicker and with lower fees.

    But if you have a 'difficult' freeholder, the statutory route might still be the best option.


    Edit to add...

    A good solicitor should ensure that you don't fall for any tricks from an unscrupulous freeholder.
    Last edited by eddddy; 29-04-2019 at 11:14 AM.
    • desamax
    • By desamax 1st May 19, 4:19 PM
    • 28 Posts
    • 30 Thanks
    desamax
    Please sign and share the petition to abolish leasehold

    https://petition.parliament.uk/petitions/238071
    Thereís a National leasehold campaign group on FB plenty of good advice there too
    • soffie
    • By soffie 4th May 19, 7:46 PM
    • 20 Posts
    • 0 Thanks
    soffie
    oh desamax what a interesting petition!
    A friend of mine is Leasehold & has nothing but issues - why are lease extensions even a thing its practically bankrupt her, i feel so so sorry for her as shes in sense had to pay another deposit on top of initial purchase deposit.. hardly easy!
    • KrunalShah
    • By KrunalShah 14th May 19, 10:54 AM
    • 1 Posts
    • 0 Thanks
    KrunalShah
    Valuation for lease extension
    Hi All

    i am in a process to extend the lease for my flat. I have been searching the process everywhere and I wondered if someone can give me some suggestions.

    Do leaseholders need to do a separate valuation of the property or is one done by freeholder is sufficient?

    Thanks
    Krunal
    • eddddy
    • By eddddy 14th May 19, 11:12 AM
    • 7,811 Posts
    • 7,921 Thanks
    eddddy
    i am in a process to extend the lease for my flat. I have been searching the process everywhere and I wondered if someone can give me some suggestions.
    Originally posted by KrunalShah
    There are 2 routes to extending your lease...

    An informal lease extension
    A statutory lease extension

    See: https://www.lease-advice.org/article/lease-extension-of-leasehold-flats-the-two-routes/

    Also see: https://www.lease-advice.org/advice-guide/lease-extension-getting-started/

    Do leaseholders need to do a separate valuation of the property or is one done by freeholder is sufficient?
    Originally posted by KrunalShah
    It depends whether you are taking the informal route or statutory route.

    It also depends whether you trust the freeholder and their valuer (and/or if you are happy to pay what the freeholder's valuer says).

    Freeholder's valuers will often value high, because they want to get more money for the freeholder.

    If you instruct a valuer, they are likely to value much lower, to help you pay less to the freeholder.
    • 0labisi
    • By 0labisi 16th May 19, 9:03 PM
    • 1 Posts
    • 0 Thanks
    0labisi
    Total newbie with a few queries? Help!
    Hello all. I live in a groundfloor maisonette. I am looking to extend the lease. I envision this being the first of many posts

    To do this the freeholders management company say I must pay a fee and they will send out a surveyor who will report and they will then give me a price....I am fine to do this however do I have to use thier surveyor, or is it more impartial if I get my own?

    To start the process should I go ahead with the survey as above or instruct solicitors right away

    next query. I cannot remember how long is left on the lease i am thinking it is just over 80 years. When I bought the property in 2011 it had over 90 years on it but this was done via a deed of variation. I have looked and I cannot find this in my papaerwork, i can find everything else! Where can I get a copy of this from?

    Thanks in advance
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