Leasehold/ freehold problems

[nymphadora]

We are selling a flat we are also shareholders in the lease company ( I think that's the right way round) this is also available on top of the flat if buyer is interested.

We have accepted an offer but the buyer is having problems with the morgage as there is only 70 years left. An extension is currently in a queue at the land registry( I think that's where) and will be still some time as they have huge back log.

Can anyone explain what's wrong with70 years to the morgage ?

Lenders don't like it because in theory, the flat will only belong to the new buyers for 70 years before the lease runs out. It's possible to renew as you say, but usually at a cost to the leaseholder.

We are renewing but stuck in a queue so won't be through potentially til after purchase. I don't get it as the flats themselves are the sort you look at and font expect to still be there in 70 years!

It's not that the flats won't be standing in 70 years, it's that the ownership of them will pass to the freeholder (presumably, the lease company you mention) after 70 years if the leaseholder does not renew the lease. Your buyers would no longer own the flat - the asset (your flat) is not as secure and that is why the lender does not want to lend.

If they bought the leasehold as well would that make it more secure?

I have only dealt with houses before & don't get this stuff

I'm not an expert on this, my only knowledge comes from personal experience but as I understand it...

When someone buys your flat, what they are actually buying is not the bricks and mortar, it is the right to live in the flat for the specified number of years left on the lease. That in effect is what you're selling, too - the right to live in the flat according to the lease.

I don't quite understand the setup with optional buying of sharehold in the leasehold company thing.... but your buyers' solicitor would be able to advise on that. They do have one, right??!

The whole leasehold/ freehold flat thing is totally wierd, don't blame you for not getting it.

I would assume so! They are buy-to let so experienced at the whole thing. Just worried they will back out!

If I were your buyers I would be extremely about stuck in the queue at the Land Registry... it just doesn't sound at all plausible (especially since LR has had very low sales to deal with over past couple of years). If your lease extension has been handled correctly, then a solicitor will have been involved, s/he can confirm that all the paperwork has been put through and that the 70 year lease has been extended.

That's all dh got told by the leasehold company. We don't have any more details. I will make him chase it up if that's the case.

Thanks

in a queue at the land registry??? can you explain??? as per lala if you've gone through a solicitor there should be a paper trail which provides evidence. and more importantly the new lease has surely been drawn up and in place, just waiting to be filed.

The leasehold co is a group of people, dh did quick called them yesterday & was told it's at land registry but won't be done yet. If they don't normally have a queue I'll make him chase again. We don't know the people in the company and don't live there so rely on letters etcto update us(dh)

Thanks for this though I would have just believed them as I have no idea. I'm just bothered about losing sale

Google leasehold advisory service and give them a call on Monday. They are set up by the government to advise on the tricky ins and outs of leasehold and freehold. It'll only cost the price of the phone call.

They'll be able to tell you what should be being done in order for you to get an extension to your lease. I have to say the Land Registry queue excuse doesn't sound plausible to me and the advisory service will be able to say if/how the Land Registry will be involved and whether the story stacks up. They'll also be able to advise you what to do to ensure you get the extension you need.

Once you know where you stand you can assure your buyer that it's being sorted out. So long as the buyer can prove that the extension is being processed and will happen the mortgage company should be fine with that (I've just sold my flat on exactly that basis!)

Thanks, do you have the leasehold for just your flat? We have something like 12 flats and 9 leaseholders (approx, I have never been involved as it's really dh flat)

Thanks!

I'm extending my lease at the moment...I have instructed my solicitor and the freehold company ( of which i am a shareholder) have instructed their own solicitor. If you do not have a solicitor then something is definately wrong.

You have to live in a property for 2 years before you can apply to extend the lease but once you have started the process it is possible to allow your buyers to continue it - you should ask your solicitor about it.

According to the management company, the land registry has made a lot of redundancies but isn't coming up with any paper trail. Trying to psych dh to deal with them ( usually my thing) as it's not in my name. Had worried call from EA now so got him in gear.

but what is your solicitor saying?

Nothing ,just get vague answers. Keep asking for papertrail. Making dh phone instead of email