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Co owner of freehold flat ,80 years left of lease ,important to extend ?

(24 Posts)
gingeroots Sat 03-Nov-12 11:29:37

I'm sure this is a stupid question and I expect the answer will be yes but ...

We live in a house divided into two flats .
The freehold is shared between us and the owners of the downstairs flat .
There are only 70 years left of the 99 year lease .

I don't know what's regarded as a short lease but I'm thinking that we should talk to our co freeholders about extending .
Any advice or views ?

gingeroots Sat 03-Nov-12 18:37:55

Oh dear is it such a no brainer that no one needs to tell me ?

Collaborate Sat 03-Nov-12 19:53:41

I think so!

PoppadomPreach Sat 03-Nov-12 19:56:00

Could you and your neighbour buy the freehold? It would make your flat more attractive when selling (unless you can get a super long lease)

LemonEmmaP Sat 03-Nov-12 19:59:44

Are you saying that you own a share of the freehold? I've only owned leasehold flats but I was under the impression owning a share of freehold meant that there were no time limits as there was no lease. Could be wrong though. But if you mean that the flat is leasehold and a third party owns the freehold, then yes, you should be looking to extend the lease (below 80 years and the lease starts to impact upon your property's value). We've done it twice so I may be able to help if you have any questions on that.

mamij Sat 03-Nov-12 20:02:59

If you own a share of the freehold, you could go to your solicitors to extend the leasehold if you are both in agreement. I think!

gingeroots Sat 03-Nov-12 20:37:19

We own half the freehold and the people downstairs own half as well .

PermaShattered Sat 03-Nov-12 22:53:51

I think you're confused! You can't own the freehold AND hold the lease. Who are the parties to YOUR lease? You and landlord?

PermaShattered Sat 03-Nov-12 22:54:04

I think you're confused! You can't own the freehold AND hold the lease. Who are the parties to YOUR lease? You and landlord?

sicutlilium Sat 03-Nov-12 23:31:06

Perma: yes you can.

Collaborate Sat 03-Nov-12 23:37:04

Of course you can own the leasehold and the freehold.
Mamij is right.

gingeroots Sun 04-Nov-12 09:57:40

So provided the other set of owners /freeholders agree it should be simple to extend lease /
Will it be less expensive ( and more straightforward ) than if we didn't own half of the freehold ?
I 've got the impression that the shorter the remaining term of the lease ,the more expensive it is to extend ?
Does anyone know if this is correct ?
Or would it only be the case if someone else owned the freehold ?

I. DONT . UNDERSTAND .

notnowImreading Sun 04-Nov-12 10:02:38

I was in the same position a few years ago and, yes, it's important to extend the lease. When you want to sell any buyer's solicitor worth their salt will make sorting it out part of the deal, so it makes sense not to wait until you've got all the other expenses of a house move going on at the same time.

IIRC it cost about £180 each for me and my downstairs neighbour and was very little effort. However, if you want to change anything about the lease apart from the length of it, you might want to look more closely at it at the same time and then it will cost more.

notnowImreading Sun 04-Nov-12 10:03:17

PS - I had about 90 years to go on mine.

ceeveebee Sun 04-Nov-12 10:05:02

We used to have a 'share of freehold' flat. The way it worked was that the freehold was owned by a company. Each flat 'owner' owned a share in the company, and the company leased each flat to the flat 'owner'. It was done this way to deal with shared expenses like fixing the roof, garden, communal areas etc. and I think (but may be wrong) that in UK property you cannot split the freehold as its attached to the plot of land, not specific floors in a building.

Our mortgage company didn't care how many years were left on the lease as they knew we owned a share of the freehold. So I don't think the length of the lease matters.

lightrain Sun 04-Nov-12 10:09:29

If you own half of the freehold then you just need to agree with yourself that you can extend the leasehold. Which obviously you will. Not really an issue.

ceeveebee Sun 04-Nov-12 10:17:40

Actually both freeholders would have to agree. But unless they are spiteful it shouldn't be a problem. Which is why mortgage companies don't really bother about length of lease in this situation

Sleepwhenidie Sun 04-Nov-12 10:17:48

Yes it is important because if/when you come to sell, it will cause you a PITA as no one will want to buy a short lease because of mortgage problems it may present.

You can agree with co freeholder to extend the lease to 999 years (known as virtual freehold), pay a nominal £1 each, but will also have to pay legal costs to get it done.

ceeveebee Sun 04-Nov-12 10:20:39

In the 5 years I lived in our flat, there were 3 purchase/sales transactions in other flats plus our own sale, and none of the mortgage companies were concerned about the length of the leases (which were less than 70 years)

Sleepwhenidie Sun 04-Nov-12 10:21:09

Sorry OP just saw your other post, no it would only be expensive (and more so as lease gets shorter) to extend if a separate freeholder was selling you the lease extension. As you are in effect selling it to yourself, you can charge what you like!

Sleepwhenidie Sun 04-Nov-12 10:29:53

I can see the logic ceevee, it shouldn't be a problem if you own a share of freehold. I wonder at what point you would have to extend the lease though? Could it be renewed at no cost on expiry? If I was OP (and in fact we are in the same position, recently bought freehold with other leaseholders and lease approx 70 years), I would rather just get it sorted and avoid any potential problems later.

gingeroots Sun 04-Nov-12 12:32:25

Great ,thanks everyone .
I can see the logic of it all now .
Though I do wonder why the original lease taken out in the 1980's ( presumably when house converted into 2 flats ) was created for 100 years rather than 999 .

StiffyByng Mon 05-Nov-12 00:21:27

Because that's the standard lease length, more or less, on leasehold flats. Remember the legislation enabling leaseholders to enfranchise is relatively recent.

I did this very recently. We got entirely new leases as the old ones weren't really fit for purpose. It didn't cost much at all as we only paid (half of) the legal costs of a new lease draft. We had to do it as we were selling and even though we had share of freehold the buyer's mortgage company (vile HSBC) insisted on a longer lease. I think anyone who hasn't bought/sold in the past three years or so won't get just how awkward mortgage companies are getting. So just do it. It's a cheap, straightforward formality.

gingeroots Mon 05-Nov-12 08:40:55

OK ,thanks ,good advice and confirming what I suspected .

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