Freehold reversion owned jointly (2 flats); extend leases?

[lotto]

Hi, if you jointly own a freehold (just 2 flats) does it matter if the lease has only 73 years to run when the other lease holder wants to extend there lease to 999, what im trying to say if that if i allow the other lease holder to extend there lease to 999 as a joint freeholder no matter what is left on my lease can they refuse to let me renew later or charge me for doing it, am i leaving myself open by not doing my lease to 999 at the same time, sorry if i've not explained to well, thanks

[jeffrey]

Best if both flats have exactly same status.

Keep freehold in joint names (X and Y).

X + Y grant one lease to X and other to Y, on same date and for identical 999yr terms.

73 yr term is inadequate for mortgage purposes anyway.

[lotto]

at the monment i an't afford to get my lease extended, so if i let him do his and leave mine until i have the money, how will effect me if i want extend it in a year or so, can he refuse? can he charge me for extending it? am i giving him this advantage by increasing his but not mine or as we are joint freeholders none of this matters, thanks

[Poppy]

If you and your fellow freeholder agree to extend both leases simultaneously, then you should agree to go halves on the legal cost. A lease extension in its very barest form is a short document specifying a new lengthened term of the existing lease, leaving the existing lease untouched. This short document is then registered at the Land Registry alongside the existing lease.

It should not cost a whole lot in legal fees if you and your fellow freeholder co-operate. Have you asked any solicitors if they would charge a fixed rate for (in your particular case) a very simple transaction?

[lotto]

If you and your fellow freeholder agree to extend both leases simultaneously, then you should agree to go halves on the legal cost. A lease extension in its very barest form is a short document specifying a new lengthened term of the existing lease, leaving the existing lease untouched. This short document is then registered at the Land Registry alongside the existing lease.

It should not cost a whole lot in legal fees if you and your fellow freeholder co-operate. Have you asked any solicitors if they would charge a fixed rate for (in your particular case) a very simple transaction?

Hi yes i have been quoted £425 +vat. this person it buying the other flat and his solicitor has asked to extend the lease to 999 which would leave me way short of his if i don't extend mine to, so what i need to know is if i leave mine for and do it in a couple of years will i encounter any problems with my lease being so low, remember im a joint freeholder, thanks

[Poppy]

Due to the fact that you are a freeholder extending in a few years will not have any adverse effect.

The drawback in your particular case is that you will pay the whole legal cost by yourself if you don’t extend simultaneously. Basically share the legal cost at the same time as your fellow freeholder at £250 each now or pay for an extension at £500 probably more in a few years time by yourself. It’s a no brainer in my book.

[tenant29]

lotto,

Why don't you ask the buyer to pay all the legal costs for extending both leases to 999 years ? There is very little extra work - just one extra agreement.

Since the buyer's solicitor is asking for your agreement on extension , you should get it done at the same time and at the other side's cost.

[lotto]

Thanks for your reply, if i ask his solicitor to extend mine as well would there not be a conflict of interest in acting for us both.

[Poppy]

But that's exactly my point and that of the other posters. :rolleyes: Extending both leases simultaneously is for mutual benefit. Don't you believe us?

[lotto]

But that's exactly my point and that of the other posters. :rolleyes: Extending both leases simultaneously is for mutual benefit. Don't you believe us?

yes i do believe and understand what you are saying, but his solicitor appears to be a mate of his,so i go to his solicitor and say oh yes extend my lease as well is it possible that in some way he could make his more favorable than mine, sorry if im sounding sceptical but i do have a very good reason for this. so if these leases are bog standard and there is noway that they can be anything other than identical then im happy with that, im just being cautious, as i was presented with these forms to sign from his solicitor, i did'nt want to just sign them, as i said in my first post im skint, so if i just sign and sort mine out later when i've got some cash, (yes i know this will end up costing more) the new owner can't refuse or charge me anything for a new lease as we are joint freeholders, thanks for your help

[tenant29]

Ask the solicitor if the extension is done a by a "deed of variation "which will one document stating that both flats are extended to 999 years at peppercorn ground rent and signed by the 2 joint freeholders and be registered at the Land Registry . You can ask the solicitor to confirm this in writing and that he is a member of the law society.

I think that you may be leaving yourself in an unfavourable position if you agreed to extend his flat to 999 years and left your own flat lease at 73 years which cannot qualify for any mortgage. If at some time in the future , you have some dispute with the other freeholder and fall out , he may refuse to extend the lease on your flat when you want to sell.

You should consider what is the value of your property with a lease at 73 years and one at 999 years. It must be worth at least 10% more if a mortgage can be obtained by a buyer other wise you would be limited to cash buyers ( and lower price).

I presume the existing "freehold title" is registered in joint names and will be changed to joint name with new buyer. Who is paying for this change and which solicitor is handling this matter ? If you don't trust his solicitor , you should use your own solicitor and ask the new buyer to bear your side of the legal costs.

[lotto]

Ask the solicitor if the extension is done a by a "deed of variation "which will one document stating that both flats are extended to 999 years at peppercorn ground rent and signed by the 2 joint freeholders and be registered at the Land Registry . You can ask the solicitor to confirm this in writing and that he is a member of the law society.

I think that you may be leaving yourself in an unfavourable position if you agreed to extend his flat to 999 years and left your own flat lease at 73 years which cannot qualify for any mortgage. If at some time in the future , you have some dispute with the other freeholder and fall out , he may refuse to extend the lease on your flat when you want to sell.

You should consider what is the value of your property with a lease at 73 years and one at 999 years. It must be worth at least 10% more if a mortgage can be obtained by a buyer other wise you would be limited to cash buyers ( and lower price).

I presume the existing "freehold title" is registered in joint names and will be changed to joint name with new buyer. Who is paying for this change and which solicitor is handling this matter ? If you don't trust his solicitor , you should use your own solicitor and ask the new buyer to bear your side of the legal costs.

It is his solicitor who is handling the freehold transfer and i was quoted £100 + vat to approve the document and then £425 +vat for a lease extension on mine, on the freehold part your right i should ask him to pay for this but that would still leave me £500 to find for my lease extension, £500 i haven't got, In time i may be able to get the money but as of today i have'nt and this guy wants his forms signed,you can see my dilemma.

So i guess i should pose this question, say im not going to grant a lease extension and im not going to sign the fom to transfer the half of the freehold, whats happens ? i appreciate your advise thanks

[tenant29]

What is your property worth now at 73 years ? The buyer will also gain the benefit of a higher value on his property if the lease is extended and will be able to finance his purchase with a mortgage. The gain could be upto 10% in value . Just tell the buyer or his solicitor that your present financial situation is bad and you cannot afford to pay any legal costs.

You really must insist the new buyer to pay your side of all the legal expenses which the buyer will probably add onto his mortgage. If you want to use your own solicitor , just get a free quote in writing and ask the buyer's solicitor to get his client to agree to pay ALL your legal costs as a disbursement.

[Poppy]

but his solicitor appears to be a mate of his,so i go to his solicitor and say oh yes extend my lease as well is it possible that in some way he could make his more favorable than mine
That's not possible because you will approve the contents of the document first and read the final version before signing it. Due to the fact you are a joint freeholder you will be a signatory on both documents.

The solicitor is merely producing two copies of the same thing. That's why you're getting two for the price of one.

So that you know, you cannot forbid a lease extension unless the tenant does not qualify. The right has been enshrined in the Leasehold Reform Act 1993.


You really must insist the new buyer to pay your side of all the legal expenses
Re-read lotto's posts. The only transaction referred to is a lease extension by the existing freeholder/leaseholder.