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Should a 76 year lease on a flat be a problem?

(10 Posts)
hackneybird Sun 28-Oct-12 19:48:49

We're selling our flat, which is in a building of four flats. Each flatowner owns a quarter of the freehold of the building along, and we are all directors of the company which administrates the leasehold.

Our buyers have a problem with the fact that the lease is only 76 years. Is this a valid complaint? Should we be discounting the selling price accordingly?

I know nothing about this type of issue and any advice would be gratefully received. We're not in a mad rush to exchange and complete as we're stuck in a massive chain which is moving pretty slowly.

herhonesty Sun 28-Oct-12 19:52:54

If you own a share of the freehold then extending the lease to 999 years is just a adminstrative process. Your solicitor should be able to do this quite easily.

KazzaRazza Sun 28-Oct-12 20:41:08

It may not be your purchaser but their lender.

Some lenders insist on there being a minimum lease term i.e. 99 years, Some lenders are happy to accept a shorter term as long as there will be 30 years remaining at the end of the mortgage term i.e. mortgage term is 25 years therefore lease has to have a minimum of 55 years.

pippala Sun 28-Oct-12 20:45:38

KazzaRazza, you beat me to it!
No mortage company will lend on a 75 year lease so it is doubtful you would be attractive to buyers.
As a sharer of the freehold it would make sense for all four freeholders to extend the lease together, saving fees.
I would approch the other three owners and put it to them as they will struggle to sell also in a few years if they wanted to.
We own a flat shared freehold between four also with a lease of 99years and at our last meeting it was flagged up that we should all extend next year.
It will cost approx £2,000 each.

herhonesty Mon 29-Oct-12 03:55:49

It really shouldnt cost 2k - it should only cost the amount it costs a solicitor to draw up a new lease. If that's 2 k the you are probably being ripped off.

MamaChocoholic Mon 29-Oct-12 05:13:17

Yes, who is the 2k going to? Normally such a fee would be to the freeholders, but that's you!

OP, definitely a valid complaint, (not like our buyer who complained about 110 years) but should be easy to sort out.

noisytoys Mon 29-Oct-12 08:27:11

I bought a 72 year lease without realising how short it was and it ended up costing £8k to extend and even then they would only extend to 99 years but that's ok because we will sell before its time to extend again

Sleepwhenidie Mon 29-Oct-12 08:36:57

Agree with herhonesty, the actual lease extension can cost each leaseholder £1 each, the only real cost will be the legal fees to administer the extension. £2k each sounds far too much.

Definitely get it done, providing the other leaseholders are happy and easily available to get signatures etc (so can be done quickly) you might make it an agreed condition of the sale to keep your buyers.

FreeButtonBee Mon 29-Oct-12 14:54:03

our lease is 83 years and it's been an issue when trying to sell. We're extending it by another 90 years as part of the sale process (buyer is paying but needs to be done before we complete)

As mentioned, it's often the mortgage company that has an issue.

lalalonglegs Mon 29-Oct-12 18:07:33

I extended a 70-odd year lease to 999 years earlier this year (I own share of freehold). It cost £500. I thought that was a bit of a rip off as it is just paper shuffling but shopped round and that seemed normal.

The reason banks like you to have long leases even if you have SoF is that freehold companies, especially in small blocks, have a habit of failing so banks want to know that the lease is long as a precaution.

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