Lease extension at same time as sale?

[maps1]

Hi all,

I'm looking to buy a place that has 69 years left on the lease. The price has been adjusted for this, and the current owner has contacted the freeholder and promptly received a quotation for extending the lease.

As a new buyer, I am conscious that the freeholder has no obligation to deal with me to extend the lease until I have owned the leasehold for two years, so I am prepared to match the quotation price to get this extended now without going to arbitration. However, the current owner moves out of the country in a month or so and is worried about the time it will take to extend the lease through him at the point of sale. Therefore, he is suggesting he can contact the freeholder and ask for a letter saying they'll deal with me at the same price after sale. I'm not convinced they will agree to this, or even that they wouldn't (quite legally), change their mind after the sale and quote me what they think it would cost in two years.

Therefore, I have a few questions...

1. Is extending the lease at the freeholder's price really likely to lead to significant delays, or is the seller just telling me that to try to save legal fees? I've read that it shouldn't take more than two-weeks if the price is agreed with the freeholder, but the current seller is telling me he has heard it can take months.

2. Is a letter from the freeholder agreeing to deal with me after sale something fairly common? It seems to me that the freeholder will want to wait to get more money out of me in two years, but then they might just want the money ASAP, so I'm not sure.

3. Is it possible for the current leaseholder to serve notice of intent to extend the lease and then sign this over to me, or does take a long time and only apply to going to arbitration rather than extending at the freeholder's quotation price?

Just to reiterate, I am quite happy to pay the freeholder's quotation price, it's just how best to do it so the sale can go through in the fastest possible time (due to the seller leaving the country), and how to keep it at the current price.

Any advice would be much appreciated!

Many thanks!

[jeffrey]

Trust no-one! Get everything legally-binding.
1. There might be delays. Who can tell?
2./3. Letter is insufficient. Get V to serve Notice of Claim on L (if not already done) and to assign its benefit to you when you complete leasehold purchase. You then take over V's rights, no need to wait two years, and -when your solicitor notifes L of your purchase- you can continue where V left off.
As this is for your benefit, L will clearly require you to pay his fees. That is what the Leasehold Reform Act 1967 demands anyway.

[maps1]

Many thanks!

The freeholder does sound like they are fairly good at replying promptly and keen to deal (especially since a few flats in the same building have already extended).

So if I ask the vendor to serve notice to the freeholder now, then he can sign this over to me on completion of sale and I can then directly negotiate with the freeholder based on the values when the notice was served? If so, is there any period of time that must have elapsed before he signs it over to me, or doesn't it matter? I can then tell the vendor that I will pay all the costs of extending etc, and he will only have to pay his solicitor to help him draft the letter of notice? I think time is his only concern as he is leaving the country for work in around a month, but he has indicated he will send anything required to kick things off.

[jeffrey]

A. Once V has assigned benefit to you, there is hardly anything ese fr him to do re lease extension.
B. Notice of Claim is under s.42 of Lesehold Reform etc. Act 1993. It has to specify an offered price ("premium") for new lease.
C. If L rejects this offer and no compromise is reached, an LVT hearing would be necessary.
D. Premium is governed by para. 2 in Schedule 13 to 1993 Act.
E. "The relevant date" for valuation is date of s.42 Notice, as stated in s.39(8).
F. If L refuses to grant lease once LVT has ordered premium, enforcement is by County Court action: see s.48(3). A period of two months from date of agreement or Order must elapse before enforcement can start.

[maps1]

Many thanks again for your replies! Very helpful!