Leasehold extension- 73yrs. unexpired- statutory or not?

[RSP]

Hi

I own a leasehold flat with 73 years remaining on the lease and am up top date with the relevant legislation.

The freeholder recently replied to my query about extending the lease and offered me an extension of 77 years based on 3.75% of the value of the flat plus costs.

This offer exceeds the general guide given by the Leasehold Advisory Service calculator so I'm just trying to figure out how the freeholder came up with this percentage. Are there any available ables to which he could have referred?

The freeholder is a really difficult individual so I'm just trying to gather as much information before instructing a lease valuer to help me decide whether the offer is reasonable or whether I ought to enforce my right to 90 years.

Any views/comments would be gratefully received.

Thanks in advance.

[jeffrey]

Start with the Leasehold Advisory Service calculator: http://www.lease-advice.org/. This may assist in comparing:
a. what L demands (77yr. extension); and
b. what LAS reckons you would pay (90yr. extension).

[sgclacy]

It is difficult to offer any advice as you have not given the rent . if it rises and indeed the value of the flat.

However based on what you have given I would suggest it is made up as follows, the figures are very rough and ready.

1) The discounted value of the reversion discounted at 5% in accordance with Cadogan and Sportelli gives for certain 2.34%.

2) The ground rent; if it was £100 per annum and the flat was £150k and the rent is discounted at 7% may give close on 1%

3) Marriage value is impossible to give any guide but is unlikely to be that great when only 77 years are remaining

Based on the very limited information you have provided I belive the landlords offer to be reasonable and if his offer is for a 90- year term at a peppercorn rent I looks as if the offer is reasonable, particular by accepting it may save you time and costs.

It would be naive not to think a landlord is going to ask a little more than the figure under the Act on the basis that there is a saving in time and costs if you accpet his slighly higher figure. Bear in mind that if you have a disputed case both sides bear their own costs and instructing professional surveyors and solicitors could easily run into thousands.

[RSP]

Many thanks for your comments.

To clarify, the ground rent is £50. The flat was valued for mortgaging purposes at £240,000 last year, so the freeholder's offer of 3.75% of the flat's value would be £9,000 plus costs.

I ahve already consulted the Leasehold Advisory Service calculator and it estimates £10,000 - £13,000 plus costs.

Any further views are much appreciated.

[TomMerralls]

on the basis of the information you have provided, sounds like a "no-brainer" to me...accept the freeholder's offer, and move forward to extend your lease to 150 years rather than go down the statutory route and incur potentially more costs.

[James 2009]

Many thanks for your comments.

To clarify, the ground rent is £50. The flat was valued for mortgaging purposes at £240,000 last year, so the freeholder's offer of 3.75% of the flat's value would be £9,000 plus costs.

I ahve already consulted the Leasehold Advisory Service calculator and it estimates £10,000 - £13,000 plus costs.

Any further views are much appreciated.

What will the new ground rent be. On the face of it - assuming reasonable or nil ground rent it looks a pretty fair offer