Extending a lease on a flat 55 years remaining

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    Extending a lease on a flat 55 years remaining

    Hi I have a flat with 55 years remaining on the lease. currently paying £170.00 per annum ground rent.

    I was offered to extend the lease by the landlord for £7,000. The rough value of the flat is £100,000 now.

    Most of the other leases have been extended direct with the landlord for similar values and some took them up and a few didn't. The ones that did still pay ground rents of approx £170 a year which is partly ground rent for the flat and partly ground rent for the garage that comes with it (2 seperate leases)

    Is it legal for the landlord to still charge ground rent after the lease extensions?

    #2
    As leaseholder , you have a legal right to seek a statutory 90 years extension at peppercorn ground rent ( = Nil ground rent ) .

    But sometimes the leaseholder may be offered ( at slightly lower price ) a non-statutory extension which goes back to 99 yrs + a big jump in ground rent.

    Comment


      #3
      Perfectly legal.

      You can force them to extend without a ground rent, which will set a maximum value on the premium that they can reasonably charge.

      In the case of RMC owned flats, retaining the ground rent can be important for the RMC's survival.

      Comment


        #4
        If your flat lease is down to 55 years unexpired, you really have to extend or you may have difficulty finding a buyer. Most mortgage lenders are not willing to offer mortgage loans for a property with lease fallen below 70 years.

        For £7000 , what is the lease extension offered to you ? .Is the lease extension offer still available. ?

        Comment


          #5
          If the lease is extended through the informal route then yes, the freeholder can retain a ground rent element.

          If the lease is extended through the formal route then the ground rent element is automatically set at a peppercorn.

          There can be benefits to extending the lease via the informal route e.g. the overall cost to you might be lower and the time taken to complete the lease extension might be faster. At a long lease value of 100K with 55 years remaining and a ground rent of £170 per annum, a 7K premium to extend your lease sounds very conservative in my opinion.

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