lease on a flat that we are thinking of buying.... duration(15 Posts)
is 75yrs. We've asked about extending but as all the other flats in the conversion would also have to pay to extend at the same time this has been refused.
Is 75yrs enough? we may be selling in 5yrs again, and I assume selling a flat with a 70yr lease really isn't a good prospect... On the other had it'll be no worse than the other flats in the house I guess! How much should we budget to have in hand to extend the least with? Clearly this would affect the bid we place on the flat....
any one understand all this? I don't as I've only bought free hold before and the last time was 20yrs ago!
Google the Statutory Process. Once you have owned the flat for two years I believe you are able to apply to the lease holder to extend the lease. I've not come across everyone in the development must do the same, I thought it was done on a case by case basis. Check www.lease-advice.org/publications/documents/document.asp?item=8#16 part of The leasehold reform housing and urban development act 1993 giving you the legal right to extend your lease by 90 yrs once you have owned it for two years. I'm no expert so get a solicitor involved before you make an offer. The landlord can refuse to extend the lease if he can come up with a reason why, like he's going to knock the flats down to redevelop. I'd be really sure of the process before you offer. Anyway read that link I sent. Hope that helps.
As Owl says, you can do it on an individual basis and you gain the right to do this after 2 years of ownership. If you go to the Lease Advice website, they have a lease extension calculator (although my solicitor has said that it comes in a bit on the low side). It may be worth speaking to the other flat owners to see if they are interested in buying the freehold - I think you only need to get 50% of leaseholders on board to do this. Again, the Lease website will have lots of advice.
At 75 years you are in the danger zone. Once your lease goes below the marriage value then ut becomes much more expensive to extend(learnt this the hard way). I think the above posters are right, I have never heard of lease renewals being tied to other properties, that would be a complete mare.
Speak to the other leaseholders, find out how good the freeholder is at maintenance etc and suss out if anyone is up for buying the freehold. I would not buy this flat unless a) the freeholders have a track record of doing a good job and there is a clear route to get your lesse extended asap that does not depend on other property owners
Walk away you have to wait two years to even try to extend and it could cost a lot.
I don't think you should walk away. Just ensure the price you're paying reflects the relatively short lease term. Or, insist that the seller exercise the right to extend the lease before completion. It's perfectly possible that the landlord will agree to do this without need for resorting to statutory process (and delays and costs involved in that). The agent should be able to find out if this is a possibility.
insist that the seller exercise the right to extend the lease before completion
I extended the lease on my old flat whilst going through the process of selling it. None of the other flats in the block had to do it at the same time as me.
Good idea etoile - I bought a flat once that had a very short lease but the then owner (who didn't have the cash to extend it herself) got all the paperwork in place so that I could do it at a set price between exchange and completion. nb: you will have to be a cash buyer or shop around very hard for a mortgagee as very few lend on flats with leases below 80 years and none will allow you the money to extend it even thought hat will add to the value .
Anything below 80 is expensive to review and as a purchase I'd say fairly 'exotic' unless you really know what you're doing. I'd say avoid.
It may be expensive to review but, as you should be paying a lot less for the property in the first place, it can be significantly cheaper than buying an identical flat with an 80+ year lease.
Personally, I would walk away. The freeholders have already refused to extend the lease. There is (presumably) a weird clause in the lease saying the leases for all flats must be extended at the same time. You may only be staying there for 5 years. Too much that could go wrong.
As a solicitor myself who just went through the process of extending our lease on a flat we own I would definitely say walk away.
First though, are you getting a mortgage to buy the property as it is unlikely that the mortgage company/lender will lend on a lease that short. Secondly, the leaseholder will have you over the barrell a bit as far as the cost of extending the lease and although there is a process whereby you appoint surveyors and go to a tribunal it can become lengthy and costly (as you'll need to pay their costs as well as yours!) Our leaseholder kindly demanded a further £2,000 just as we thought we had agreed an amount.
I would also caution getting the vendor to do this. I did thos when buying my flat. Was told all was progressing, forked out for survey and stuff, even rented the flat as it was vacant. Got to exchange day and they had done naff all except discover one of the freeholders was awol. I went ahead as I loved the flat and it would have taken my 6 mos to save enough to do another survey and search. It took over 2 years and a whole wodge of cash to sort the lease. It all turned out well in the end due to the craze ee London property market, but I wouldn't do it again
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