Lease Extension Negotiation

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    Lease Extension Negotiation

    Hey All,

    I have recently got in touch with the leaseholder to discuss the lease extension as I currently have 82 years left. After the original payment to kick start the processes was paid I have received an offer.

    The offer is for £12000 for an additional 43 years, with the ground rent remaining at 200pa.

    Must admit when I saw this figure my heart dropped especially as when entering details online on various lease calculators the figure that was returned was 6000.

    The question is what sort of counter offer could I go back with? Would it be to cheeky to go back with a premium of £7500 and keep the 43 additional years and a ground rent of 200pa?

    Thanks in advance

    #2
    How much is the flat worth with a very long lease and does the ground rent rise and if so when and by how much?

    Comment


      #3
      Leaseholders have a legal right to seek a statutory 90 years extension = 82 + 90 = 172 years at peppercorn ground rent which various calculators show at £6000.

      The offer at £12000 for 43 years and £200 ground rent does not comply to the statutory entension and this alternative offer, after making original payment, may be an criminal offence ( switch selling ) under the Fraud Act 2006 .

      So make a cheeky offer at £6000 for statutory 90 years extension at peppercorn ground rent.

      Comment


        #4
        A private negotiation is not illegal and does not have to comply with the statutory terms, this is a typical offer. However as you say it is too high although the statutory route is lengthy. When the new legislation comes in it is proposed to be 999 years so if I were you I would wait for that

        Comment


          #5
          Thank you all for your replies.

          I am not sure exactly at how much the longer lease will increase the value of the property, I had a mortgage valuation and the valuation at 82 years was already marked high, I don’t think with a longer lease I will get more than an extra 10-15k over the valuation.

          Sounds like k should try my luck and go back to them with a cheeky 7k offer for 99 years.

          I read about the new law that is to coming in, but my only concern is what happens if it doesn’t? And then the lease drops over 80 years, then I will have to deal with the whole marriage value etc. I’ll be more than happy to wait is just the unknown, and I believed there will be no more talks about the new law until it’s being passed through which is a year away I believe.

          Comment


            #6
            I am confused, why is it "cheeky" to offer £1000 more than the statutory value for a worse deal (keeping ground rent) ???
            With all due respect you don't know what you're doing and need to employ a professional to serve section 42.

            Comment


              #7
              No you are correct I don’t really know what I’m doing. It’s the first time I ever had to deal with Lease Extension and at this rate hope it will be the last time.

              I am planning to submit a informal counter offer at 7k with an additional 99 years to be added to the lease at peppercorn ground rent.

              I am hoping to agree on a deal without serving section 42 as the legal cost could be higher from what I read online. I will try the informal route and I have already discussed with a solicitor so I suppose if this option doesn’t work then Section 42 will be the next step.

              Comment


                #8
                It's a complicated process and you can easily be ripped off by greedy freeholders. Most solicitors are also pretty clueless and expensive. I have pm'd the name of a trustworthy specialist. Don't risk getting it wrong and your term dropping below 80 years

                Comment

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