Jointly-owned f/r; one lessee seeks Lease Extension

[Jan]

We live in a converted house of 4 flats, each flat owner having a 1/4 shareholder in the freehold company. One of the flats is on the market and we have been informed that as the lease only(!) has 79 years left, we need to extend it before any buyers are willing to proceed with a purchase. Naturally, the 3 remaining owners are not particularly keen to incur costs which will reap them no benefit in the immediate future. Also, we have been on a site that talks about costs for negotiating the value of each flat with the Landlord but as we are all the landlords do we need to do this?

Can anyone suggest an easy and cheap course of action?

From looking at other enquiries, it would appear that telling the vendor to reduce the cost of their flat to take into account future costs for extending the lease might be the best option and then we can investigate this situation at our leisure, rather than being given this weekend to come back with a reply!

[tenant29]

We live in a converted house of 4 flats, each flat owner having a 1/4 shareholder in the freehold company. One of the flats is on the market and we have been informed that as the lease only(!) has 79 years left, we need to extend it before any buyers are willing to proceed with a purchase. Naturally, the 3 remaining owners are not particularly keen to incur costs which will reap them no benefit in the immediate future. Also, we have been on a site that talks about costs for negotiating the value of each flat with the Landlord but as we are all the landlords do we need to do this?

Can anyone suggest an easy and cheap course of action?

From looking at other enquiries, it would appear that telling the vendor to reduce the cost of their flat to take into account future costs for extending the lease might be the best option and then we can investigate this situation at our leisure, rather than being given this weekend to come back with a reply!

If the selling flat can get a higher price , it can RAISE the market value of the other 3 flats. So why don't you arrange for all 4 flats be given a free lease extension of 90 years at peppercorn ground rent by the freehold company and get a quote from 3 different solicitor firms to add this onto the existing lease and registering the extension at the Land Registry ?

[Tax Accountant]

If the selling flat can get a higher price , it can RAISE the market value of the other 3 flats. So why don't you arrange for all 4 flats be given a free lease extension of 90 years at peppercorn ground rent by the freehold company and get a quote from 3 different solicitor firms to add this onto the existing lease and registering the extension at the Land Registry ?

Or alternatively to consider extending all the leases to 999 years to address this question for once and only.

Ramnik

[Richard Webster]

Not sure extending for 999 years is necessarily a good idea. If you extend for 90 then in 80-100 years time the lease will need to be extended again and by then the wording will be hopelessly out of date and not in accordance with then prevailing conditions. By restricting the extension you can at least make sure that any further extension also modernises the lease. Someone with a 999 year lease could simply be awkward at the time!

On the main point, it is obviously sensible to agree to an extension. As a Conveyancing Solicitor I can't really see a big problem with this. If the buyer wants an extended lease and the other lessees are happy to do it then you could probably instruct the seller's solicitor to sort it all out on behalf of the company and either the buyer or the seller would pay his costs for doing it. All the joint freeholders have to do is arrange for the directors to sign the extension deed.

Richard Webster.

[Tom Merralls]

The position here is quite simple and straightforward. Usually, when a group of leaseholders buy their freehold, the next natural step is to extend their leases to 999 years. I take Richard's point about merely extending by say 90 years, but what is more attractive to a lay buyer...a lease which has 170 years remaining or one that has 999 years remaining? We all know there is little practical difference, but psychologically, a 999-year lease is more marketable, particularly in the present economic climate.

I am a lawyer who has specialised in lease extesnions and freehold purchases (known as Leasehold Enfranchisement) for 5 years now. I also deal with "bulk" lease extensions i.e. when leaseholders have bought their freehold title.

It is cheaper for all leaseholders to extend their lease at the same time, but if it is merely one person who currently wishes to extend their lease, I can arrange this. This process should not take much more than a few weeks to complete. Please call me on 020 3326 5031 or email me at tom@tjmlaw.co.uk and I will be happy to discuss (for FREE!) your options.

Tom Merralls

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