Lease Extension

[steve-morris]

Dear readers,

I am in the process of exchanging contracts on a flat which only has 60 years remaining on the lease. I have already approached the freeholder & they have quoted £20,000 & are only offering an extension of 39 years (to reset the lease back to 99 years). I am aware that if you live in the property for 2 or more years you gain a statutory right to increase the lease by 90 years with no increase in ground rent. The current owners are keen to complete within the fortnight which doesn’t leave me enough time to ask them to extend the lease on my behalf. I have read somewhere that I can ask the current owners to issue a notice to the freeholder which will give me the right to extend the lease as soon as I move into the property. Is there a standard letter the current owners should send & do they require a response. If so what proof do I need that they sent the letter if the freeholder disputes it? Your advice would be greatly appreciated.

Kind regards,

[Corinne Tuplin]

Hi Steve,

Unfortunately, the current leaseholder would need to serve the official documentation on the freeholder requesting a statutory lease extension before assigning (i.e. transferring) the right to you.

As you are aware, once you own the flat yourself, you will have to wait two years before you can apply for a lease extension.

This is, however, using the statutory procedure.

Should you wish to enter into informal negotiations with your freeholder directly upon purchase, you can. Bear in mind, however, that you may end up paying more informally than you would if the formal route was open to you.

Delaying exchange may be an option for you to consider if you wish to proceed with statutory lease extension immediately.

I hope this assists.

Corinne Tuplin
Topic Expert
Pro-Leagle
www.proleagle.com

[steve-morris]

Corinne,

many thanks for your prompt responce, it is much appreciated. As you have said in your responce I would like the current owner "to serve the official documentation on the freeholder requesting a statutory lease extension" which they could then ass onto me. Is it unlikely that this can be completed by the 14/08 or is it a lenghty process?

kind regards,

Steve

[tenant29]

Steve,

Don't rush into a bad deal ! ( 20K for 39 years extension back to 99 years is a plain foolish option ). In 19 years time , your flat will have the same problem again. What is the name of the freeholder and managing agent ?

Statutory right gives a 90 lease extension at peppercorn rent . You should contact a Chartered surveyor and get a valuation for your flat after lease extension with 150 years lease . You will be expected to pay a "marriage value" equal to half the gain in value . When you know the amount, you can make a lower offer to the freeholder who may not want to come before the LVT.

You should ask your conveyancing solicitor to advise you on what notices to serve and what response is required to take over the seller's rights. Unless you are urgent to move in, you should ask the seller to sort this lease extension problem out with the freeholder before you exchange .

[steve-morris]

Hi Corinne,

Many thanks for your advice, since your last post I have contracted a lease advice company & they are going to submit the notice to the landlord on my behalf. As you did they have also recommended that I have the lease survey, this is taking place on Thursday with a view to submitting the notice to the landlord shortly afterwards. Apparently the lease advice company deal with around 5 extensions a week with my landlord.


kind regards,

Steve