I own freehold to building of two flats; extend lease too?

[renal]

I have a freehold flat (flat within a 2 flat conversion- the other flat being leasehld with a similar lease) with approx 67 year lease. I own the full freehold and am wondering if there is any benefit in extending the lease. If the other flat ends up wanting a share of the freehold, could I extend lease then without a financial penalty?

[jeffrey]

I have a freehold flat (flat within a 2 flat conversion- the other flat being leasehld with a similar lease) with approx 67 year lease. I own the full freehold and am wondering if there is any benefit in extending the lease. If the other flat ends up wanting a share of the freehold, could I extend lease then without a financial penalty?
Let's restate what the position seems to be.
1. Do you own freehold of whole building?
2. If so, it's probably subject to a lease of flat2 (other flat).
3. So you don't actually have just a freehold flat (anathema to English law).
4. So you have no lease that needs extending.
5. However, Lessee of flat2 (T2) does have a lease that needs extending.
6. If T2 has owned lease of flat2 for >2yrs., he/she can require a 90yr. extension (and reduce ground rent to a peppercorn).
7. You could- if you want- do that even if T2 has not owned for 2yrs.
8. You would be entitled to charge a premium [purchase price] for that lease extension. T2 would pay:
a. that premium;
b. your legal fees; and
c. your surveyor's fees for setting a valuation.

[renal]

Thank you Jeffrey for your helpful response. I do own the freehold for the whole building. My worry is that although the upstairs flat is not looking to extend the lease at the moment, I am worried that if/when they do they will want a share of the freehold. If they want a share of freehold then if I want to extend my lease, I would have to pay them 50% of the fees to extend lease. I am assuming that if I do this now then I do not have to pay anything as I own it.

[jeffrey]

if I want to extend my lease
But, as I explained, you do NOT have a lease!

[Poppy]

If there are two flats in this building (and you own one), then the other lessee cannot force a sale of the freehold, because he cannot make up the necessary two-thirds of qualifying lessees.

[thevaliant]

But, as I explained, you do NOT have a lease!

Renal needs to clarify:

Who owns freehold? - Them, or are they joint owners with upstairs flat perhaps (or perhaps Renal+spouse)?
Does anyone have a lease on ground floor flat? Is it them (Jeffrey may clarify but if it is Renal then they don't really have a lease as they cannot lease off themselves correct?) or someone else such as Renal+spouse?
Lessee of upper flat, definetely does have lease?

I think it matters quite a lot the true answers to these questions. Dig out the paperwork. You may be surprised at what you find (which often differs from what you think).

[Poppy]

Read the first post more carefully. Renal has already said:

I own the full freehold ...
Renal has yet to clarify if his/her flat is subject to a lease. Renal may have bought both the freehold and the lease after the initial lease grant on the open market (at the same or different times) - think about it.

Renal - over to you...

[thevaliant]

Read the first post more carefully. Renal has already said:

Renal has yet to clarify if his/her flat is subject to a lease. Renal may have bought both the freehold and the lease after the initial lease grant on the open market (at the same or different times) - think about it.

I am aware of this, but, if what I believe is right. If Renal owns both the freehold and the groundfloor lease, they don't really own a lease as you cannot lease from yourself, though Jeffrey may clarify.

Further, people frequently come onto these boards saying "I own this" when, they actually mean "I + spouse own this" or "I + someone else own this" which legally is very different (If Renal owns freehold and Renal+spouse owns lease, that is perfectly acceptable or vice versa).

Finally, sometimes people make mistakes (I have) and think they own something when they actually don't (note a thread from the rental forum where someone believed they were renting flat+car park spot but upon checking only rented flat so complaint about car park spot couldn't be acted upon).

Thanks.

[renal]

I own the whole freehold on my own for the 2 flats and also have a lease with a separate land registry number on my own. when I bought the flat I bought the leasehold and freehold interest together.

Am I allowed to own the freehold on my own? When I bought 5 years ago I had involved a solicitor in the purchase

[thevaliant]

I think Jeffrey's post (No. 2) is your best advice therefore. You have no lease, and therefore extending is pointless. It is your tenant, above you, who has the problem (which might I say, is in your interests he does nothing about for as long as possible).

[jeffrey]

I think Jeffrey's post (No. 2) is your best advice therefore. You have no lease, and therefore extending is pointless. It is your tenant, above you, who has the problem (which might I say, is in your interests he does nothing about for as long as possible).
Post #9 indicates that renal does have a lease, searate from his/her freehold reversion. Unless this has merged, it is still in existence. To extend it, if that's required, he/she needs to organise things so that:
a. the f/r is in a different name (or combination of names) from the leasehold; and
b. the f/r owner(s) can then extend the lease.

[Markonee1]

If your lease, which I gather is identical to the upstairs lease still exists in law, then it makes no difference whether you extend your lease or not, as the diminishing value of your lease is counteracted by the rising value of the freehold, which you own. As long as you own both, as a leaseholder you can refuse to create the majority to force selling freehold back to yourself and your neighbour jointly...If you decide to sell freehold on to a new 3rd party, then grant yourself an extension by some means that may be available using a friendly intermediary.

The Land Registry specifically told me that they wouldn't assume amalgamation of leases into freeholds unless it was clear that that was the intention of the owner. The reason given, was that you may temporarily own one of the assets with the intention of selling it on. A bit like 2 or more ships passing.
Maybe creation of a new lease is different, where freeholder/leaseholder names need to differ?

[jeffrey]

Maybe creation of a new lease is different, where freeholder/leaseholder names need to differ?
Merger is either:
a. explicit (i.e. Deed expressly states that T is merging leasehold [newly acquired] into f/r); or
b. implied by T's actions (e.g. mortgaging property as a freehold connotes that lease is subsumed into it).