Offer from Freeholder

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    Offer from Freeholder

    I've just be contacted by freeholder pointing out that there is only 76 years remaining on my lease for the flat.

    The flat is one of 3 in a Victorian Conversion property.

    The freeholder has pointed out that to renew my lease under the Common Leashold and Reform Act 1993 that I will be paying a premium and that the the lease will be extended to 90 years and the ground rent would then drop to a peppercorn. This will include freeholder surveyor and legal fees to approx £8000

    Instead he's offering me the 2 options below

    1)An extension to the lease of 90 years and the ground rent dropping to a peppercorn for £7000

    or

    2)A new 99 year lease at a cost of £2800 with a new rent of £250 pa link to RPI

    At the moment the property is let out although we could be looking to sell in a few years time.

    My dilema is if I really need to extend at all ? If do then what will be the total cost be if I'm taking into consideration any legal fees etc. (which I guess I would still need if take one the freeholders offers)

    Any pointers appreciated

    #2
    What is the value of the flat if it had a very long lease and what is the ground rent rent and any increases

    Establish how much the landlords legal and valuers cost will be before commencing

    Comment


      #3
      You may find it difficult to sell the flat with the number of years currently remaining. This is because any lender of a potential buyer will want to ensure the capital value of the asset does not diminish before the end of their mortgage period (usually 25 years).

      I I were you, I'd opt to extend now to avoid any issues, and the figures involved don;t sound extortionate, but perhaps other can advise you on value, and which of the options may be better.

      Comment

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