Extension of lease new buyer (73years left)

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    Extension of lease new buyer (73years left)

    Hello,

    I am thinking of buying a converted house in Sutton area. The property in question is a converted house that's been split into 2 flats. It has 73 years left on lease. I am a first time buyer and don't know much about the process. The property is on the market for £215,000 and we are in the process of offering. We have been trying to get some kind of ball park figure on the price of extension of the lease but so far the estate agent is keeping saying they are still waiting for the written confirmation from the freeholder regarding the price. The freeholder lives down stairs of the converted house.

    My questions are;

    1. Do I wait till I get written confirmation about price of extension or go ahead with the offer? (I'm taking rough price into my final offer price)

    2. If I decide to go ahead with the offer/purchase is there some kind of rules as to how much freeholder can charge (can they charge me what they want or is there maximum?).

    3. Isn't this information pre-requisite before they market the property? Shouldn't estate agent know this information? (I have asked them so many times but the answer is not forth coming).

    4. I would ideally like to extend the lease at the same time as exchanging contract to 99 years. Is this possible to arrange that?

    5. In general I really don't know much about the buying process can someone talk me through it please?

    6. Is it better to get current owner to extend the lease before exchanging? Is there a process? (i.e. sign some kind of agreement and price?)

    7. Do I have to live there for two years to be able toextend the lease?

    Many thanks

    #2
    I recommend that you visit the Leasehold Advisory Service website for more information.

    In my opinion 73 years unexpired is loads of time.
    Originally posted by kieranchoi@hotmail.com
    1. Do I wait till I get written confirmation about price of extension or go ahead with the offer? (I'm taking rough price into my final offer price)
    That’s your decision. How long do you intend to own this flat?
    Originally posted by kieranchoi@hotmail.com
    2. If I decide to go ahead with the offer/purchase is there some kind of rules as to how much freeholder can charge (can they charge me what they want or is there maximum?).
    The price is negotiable and there is no maximum.
    Originally posted by kieranchoi@hotmail.com
    3. Isn't this information pre-requisite before they market the property? Shouldn't estate agent know this information? (I have asked them so many times but the answer is not forth coming).
    No. Not necessarily. Only if the existing lessee tried to extend their lease and decided to include this fact as part of the marketing process.
    Originally posted by kieranchoi@hotmail.com
    4. I would ideally like to extend the lease at the same time as exchanging contract to 99 years. Is this possible to arrange that?
    The Leasehold Reform Act 1993 has provision to extend leases by a minimum of 90 years.
    Originally posted by kieranchoi@hotmail.com
    5. In general I really don't know much about the buying process can someone talk me through it please?
    You should consult your solicitor - after all you are paying them. Additionally you should conduct your own research on the internet or buy a book or borrow a book. It’s a large and complicated subject. No two sales are the same.
    Originally posted by kieranchoi@hotmail.com
    6. Is it better to get current owner to extend the lease before exchanging? Is there a process? (i.e. sign some kind of agreement and price?)
    Yes. Visit the Leasehold Advisory Service website for a reliable explanation.
    Originally posted by kieranchoi@hotmail.com
    7. Do I have to live there for two years to be able toextend the lease?
    Yes. But if you have good negotiating skills you may be able to convince the freeholder not to wait.

    At the end of the day, you should try to encourage (not tell) the freeholder and existing lessee to come to an agreement about extending the lease before you buy.

    Comment


      #3
      Thank you for your reply Poppy.
      In reply to your question, I am planning to live there for at least 5 years if not longer and possibly sell the property and move. Because the remaining lease is less than 80 years I'm worried about Marriage Value when I'm extending the lease. Say in 5 years time I would only have 68 years left on the lease and I'm worried that I will have difficulty in selling the flat. That's why I want to extend the lease before it becomes bigger problem later. From what I read on this web site I would have to pay 50% of the increase in value of the property plus other cost

      I was told by the estate agent that the property was on the market for about 3 months and that they lowered the price by about £15k for a quick sale as the vendor is relocating to other country. Am I right in assuming that the extension of the lease from 73 years to 99 or 125 years would increase the value of the property by £10k to £15k based on the £215k property price?
      I know there are other factors to consider but just based on the unexpired lease am I correct in assuming this?

      Oh and the ground Rent is £50 per year

      Comment


        #4
        Leasehold Reform Act 1967

        1. Get your leasehold vendor to serve a statutory Notice on freehold reversioner, as long as your vendor has owned for >2 years. The benefit of the Notice can be assigned to you on completion of your leasehold purchase (by separate Deed) so you can begin at once without waiting 2 yrs more.

        2. No maximum but Leasehold Valuation Tribunal can fix price if you can't agree.

        6. Yes- better if lease comes pre-extended.

        Originally posted by kieranchoi@hotmail.com View Post
        Hello,

        I am thinking of buying a converted house in Sutton area. The property in question is a converted house that's been split into 2 flats. It has 73 years left on lease. I am a first time buyer and don't know much about the process. The property is on the market for £215,000 and we are in the process of offering. We have been trying to get some kind of ball park figure on the price of extension of the lease but so far the estate agent is keeping saying they are still waiting for the written confirmation from the freeholder regarding the price. The freeholder lives down stairs of the converted house.

        My questions are;

        1. Do I wait till I get written confirmation about price of extension or go ahead with the offer? (I'm taking rough price into my final offer price)

        2. If I decide to go ahead with the offer/purchase is there some kind of rules as to how much freeholder can charge (can they charge me what they want or is there maximum?).

        3. Isn't this information pre-requisite before they market the property? Shouldn't estate agent know this information? (I have asked them so many times but the answer is not forth coming).

        4. I would ideally like to extend the lease at the same time as exchanging contract to 99 years. Is this possible to arrange that?

        5. In general I really don't know much about the buying process can someone talk me through it please?

        6. Is it better to get current owner to extend the lease before exchanging? Is there a process? (i.e. sign some kind of agreement and price?)

        7. Do I have to live there for two years to be able toextend the lease?

        Many thanks
        JEFFREY SHAW, solicitor [and Topic Expert], Nether Edge Law*
        1. Public advice is believed accurate, but I accept no legal responsibility except to direct-paying private clients.
        2. Telephone advice: see http://www.landlordzone.co.uk/forums/showthread.php?t=34638.
        3. For paid advice about conveyancing/leaseholds/L&T, contact me* and become a private client.
        4. *- Contact info: click on my name (blue-highlight link).

        Comment

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