Assignment of rights during sale

[Simon_a_h]

Hi,

We're currently trying to buy a flat with a lease that has 63 years remaining. As a result the leaseholder is in the process of applying for an extension and put the flat up for sale on that basis. Unfortunately this is dragging on a bit and since our offer was accepted in July nothing much has happened so I was interested in advice people had on how we could speed things up.

The timeline (to my knowledge) is that a tenants notice was served in May after negotiations which didn't get very far. The landlord replied 2 months later accepting the right and terms of the extension but not the valuation. The situation doesn't seem to have progressed far from there and recently the leaseholder issued a final warning before referral to the LVT.

Given that the leaseholder and landlord cannot agree a value for the extension I am reluctant to take on the lease extension process because this would inevitably lead to a loss to us. However it seems that the tribunal takes c3 months to reach a value and that there is then 2 months after this for the landlord to submit a suitable lease - so this could carry on for some time.

Is it possible to arrange a way whereby we purchase the property with an assigned right for the extension but that the risk in terms of the value of the extension is not passed to us? And does anyone have any experience of this?

Unfortunately we have no idea how far apart the two valuations are - but the expected cost as far as I can see from the internet is £25-30k.

Thanks

[jeffrey]

You cannot have it both ways! What did you mean by "the risk in terms of the value of the extension is not passed to us?" Either:
a. V extends existing lease by paying premium to L, then sells to you the extended lease at its enhanced value; or
b. V serves Notice of Claim, you purchase existing lease at its market value, V assigns to you (on completion) its benefit, and you then extend existing lease by paying premium to L.

[Simon_a_h]

Probably trying to have my cake and eat it!

By transfering risk I mean that the leaseholder is presumably offering less than the freeholder feels they can get, and that under option a we would end up paying any excess.

Our solicitor advised us not to do b (not sure if this was because of the cost issue or just for an easy life though) and a is taking a long time. Hence hoping for a 'third way'. Maybe part of the sale proceeds held in an account until the LVT makes an assesment, or similar...? Or maybe that's too OTT and I should just be patient...

Thanks

[quarterday]

get the sellers to agree terms for the extension with completion simultatenous with the date of purchase. Landlords dont really want to go to the LVT. It has been said that spread betting is more predictable. And costs do run up, so usually worth splitting the difference.

In my experience a 63 year lease is very significant disbenefit, and if you get the lease extension, to include all costs at about 15% or so of what the flat would be worth on a very long lease then you have settled at about the right figure