Leasehold extension - as the freeholder

[FSVin]

Hi all,

I live in an unusual set up, in an upper Tyneside flat (i.e., Victorian dwellings that were built as an upstairs flat and a downstairs flat, but which look like a house from the outside, apart from the two front doors). As the upstairs owner, I own the freehold to both the upstairs and downstairs flat (a local quirk), with the downstairs owner obviously being on a leasehold.

I've had a letter through from downstairs' solicitor saying that they are wanting to extend the lease. A-OK, of course, but I'd like to know what to expect before ringing them back.

The downstairs flat is tenanted, so I've never had any contact with the actual owners before. It appears that the landlord has recently popped his clogs, too, so this request is being sought by the executors (presumably family members who have inherited it, from what I know of the situation). I did notice in a quick google that theoretically the "new" owners are legally obliged to own it for two years before pursuing a lease extension - would this still be the case in terms of inheritance?

Is anyone able to give me a quick overview of the process, and what would be required of me? I have health stuff going on at the moment that means I can't easily do a lot of reading up on this, and which means I'm keen to avoid any stress. I'd also be unable to spend any money on solicitor's fees without knowing with certainty that I'd be getting them paid back by the leaseholders.

Thanks for any advice.

You'll need a solicitor to do it for you. You can ring a few for some quotes and them ask the tenant to pay your fees. There is leasehold reform legislation which gives a tenant the right to have a new lease but I don't know any more than that I'm afraid.

Am in the process of extending the lease on my flat, I've got to pay the landlord solicitors fees... but not sure how normal this is?

Thank you Atlastadragon.

I think that is normal OldSpeclkledHen. The lease extension benefits the leaseholder, not the freeholder, so it wouldn't make sense for the freeholder to be hit with a bill for it.

The Leasehold Advisory Service has a rough calculator of how much to charge them. Hopefully someone will come along to tell you exactly how to do it.

Executors step into the shoes of the dead person, so they can do the extension. They can’t complete anything until probate is actually granted.

Once you agree the terms of the lease extension, you instruct your solicitor. Solicitor doesn’t do any work until they have a formal promise from the tenant’s solicitor the tenant will pay your legal fees regardless of whether or not the extension completes.

For a statutory lease extension the legal owner has to have owned the property for 2 years. For an informal lease extension you can set your own terms and price. So for example you may go for a slightly lower price on the extension but increase the ground rent, or do a lease extension for less years than a statutory lease extension (a statutory lease extension is for 90 years and ground rent reduced to zero).

You are entitled to get your own valuer that the leaseholder will have to pay for under a statutory lease extension. Under an informal lease extension it is up to the 2 parties to negotiate who pays for what.

How long is left on the lease for downstairs? Do not sell yourself short if it is a short lease.

Can you buy downstairs? How long is the lease as this would affect the price
Definitely liaise with a solicitor before anything as it'll be all sorts of things you're unaware of

Thanks folks. There's less than 80 years on the lease, which I understand makes it more problematic for them.

@custardbear I wouldn't be able to buy if they did put it on the market. But hopefully they'll keep it on as a rental property, and keep the same tenant, who is a nice neighbour to have.

All I want (need) is an easy life at the mo

It just means they have to pay you more OP.

That’s an odd set up, I thought with those flats you should both be leaseholders with share of free hold? Not one of you the full freeholder?

@Onjnmoeiejducwoapy

That’s an odd set up, I thought with those flats you should both be leaseholders with share of free hold? Not one of you the full freeholder?

Not odd at all. It all depends on who bought the freehold.

We are the freeholders to a block of 4 flats (converted building). No one else wanted to buy it that lived in the block. Now we have moved out and sold our leasehold flat but we still own the freehold. We are in the process of selling the freehold but so far no leaseholders want to purchase it, so it will go on the open market. Very short sighted of the leaseholders as they will have no control over service charges etc.....

@Onjnmoeiejducwoapy

That’s an odd set up, I thought with those flats you should both be leaseholders with share of free hold? Not one of you the full freeholder?

The usual Tyneside set up is that the upper flat owner will own the downstairs freehold, and downstairs will own upstairs, to ensure each is beholden to maintain the building as affects the other (otherwise, if they owned their own freehold, there'd be no way of enforcing roof repairs etc). So I understand.

But here I think when the dwellings were built, one owner would own the entire building, live upstairs, and rent out downstairs, hence the leasehold situation. Eventually though they started getting sold off separately (bar a few that got knocked into one house).

@BernieWales Very helpful, thank you.