extension reply - help

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    extension reply - help

    Just trying to understand the lease extension reply process.
    Leaseholder already served a S42 apparently in good faith on behalf of someone wanting to buy flat. However the buyer then pulled out and leaseholder didn't want to incur the obvious extension costs themselves - so withdrew the claim in writing to the freeholder.
    Fast forward a few months, a new buyer apparently comes along and asks leaseholder to serve a S.42 so they don't have to wait 2 years to extend lease themselves.
    How does the freeholder reply to this second S42 claim? Do they just fill in the counter form S45 saying the S42 is invalid and the leaseholder has to wait 12 months from date they withdrew?

    #2
    A simple letter advising of the facts and stating that the lessee is not able to serve a new Section 42 notice until 12 months from the date they withdrew

    no special form no prescribed wording just a simple letter

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      #3
      thank you sgclacy Very helpful

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        #4
        Mr Clacy is 100% correct. If there is a lease extension, it would be voluntarily whether on the statutory style or reserving a ground rent. The optimal lease extension to offer is 999 years at a peppercorn. You could offer under a letter marked without prejudice a lease extension of 999 years for a little bit more than a stat lease extension. A 999 year lease extension would be without the s61 landlord buy back rights that go with a stat lease extension and is therefore worth a bit extra!!

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          #5
          Originally posted by flyingfreehold View Post
          Mr Clacy is 100% correct. If there is a lease extension, it would be voluntarily whether on the statutory style or reserving a ground rent. The optimal lease extension to offer is 999 years at a peppercorn
          Optimal for whom ? Certainly not the freeholder, offer 99 years at an extortionate rising ground rent and you might get another bite of the cherry in 20 years time.

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            #6
            My advice would be when granting a new lease outside the act that the following term is incorporated into the deed:-

            Prior to the granting of the lease the landlord offered to extend the lease under the provisions of the Leasehold Reform, Housing and Urban Development Act 1993 for a premium of £XXXXXX and the terms in this deed are an agreed alternative.

            This should protect the landlord if at a latter date the lessee claims that the terms are now unfair because it was written in complex legal language or its for no service. It also makes sure the lessee consider the terms of the new ground rent BEFORE signing the deed, which of course is the root of the problem for those who claim the ground rent terms they have been now unfair. In the vast majority of cases it has arisen because the professional advisors acting for lessees did not value the burden the ground rent places on a property. It is of course for no service and therefore if a ground rent of say £350 per annum is placed on a property rising in line with the RPI then the premium paid for the new lease should be some £10,000 to £12,000 less than if a peppercorn was in place

            The Law Commission in January 2020 published “Leasehold homeownership: buying your freehold or extending your lease”


            https://s3-eu-west-2.amazonaws.com/l...nuary-2020.pdf


            In paragraph 6.151


            6.151 It appears to us, therefore, that if Government were to take forward the idea of a 0.1% cap on ground rents in enfranchisement valuations, particular consideration would need to be given to these kinds of cases to ensure the landlord’s A1P1 rights are not infringed. We think that an appropriate solution would be to create an exception to the cap to cater for situations where it is thought the landlord has not been adequately compensated for the grant of the lease via the premium paid at the point of purchase. An exception would enable the full rent under the lease to be taken into account on an enfranchisement valuation, as is the way under the current law.







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              #7
              Originally posted by Section20z View Post

              Optimal for whom ? Certainly not the freeholder, offer 99 years at an extortionate rising ground rent and you might get another bite of the cherry in 20 years time.
              In London, the "second bite of the cherry" will take place when the flat is next sold. Today it appears that due to the near hysteria over ground rent terms that any lease in London below 100 years is viewed with caution and rarely do we see leases not being extended on sale where the term is below 90 years

              Comment


                #8
                Actually another new bite of the cherry has very recently emerged. Where an estate management charge is reserved as an estate rent charge; typically with f/h or l/l houses rather than flats maisonettes. Lenders happily lending on these for years have suddenly decided that they dont like these and want a variation.

                Comment


                  #9
                  Originally posted by flyingfreehold View Post
                  Actually another new bite of the cherry has very recently emerged. Where an estate management charge is reserved as an estate rent charge; typically with f/h or l/l houses rather than flats maisonettes. Lenders happily lending on these for years have suddenly decided that they dont like these and want a variation.
                  That's interesting, but very specific. Are we talking just "estate management charges" or any case where service charge is reserved as additional rent, which is quite common ?

                  Comment


                    #10
                    If unpaid can be converted into a lease

                    https://www.eversheds-sutherland.com...rt/rentcharges

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