76 year lease on share of freehold

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    76 year lease on share of freehold

    Hi there,

    This is a leasehold length on a share of freehold question:

    A few months ago I had my offer accepted on a flat marketed as 'share of freehold'.

    Quite some time later I found that the lease on the property was 76 years.

    I have used this issue as a point of negotiation with the vendor as I'm uncomfortable with the lease length and, although very helpful with an offer to go halves on the legal costs, he refuses to extend the lease before purchase as it will slow down their 'chain'. (I am chain free - everyone in their chain is ready to exchange).

    The other two flats in the house have the same length lease and, I am told by the vendor, would be willing to extend their leases too.

    What are the worst case scenarios if I go ahead and purchase without lease extension?

    Are they: The other freeholders don't wish to pay for the cost of it and I have to fund it? One of the other freeholders is absent and I can't therefore get the lease extended?

    What other problems could I face? And should I put my foot down and ask for the lease extension regardless of the chain?

    Any thoughts or comments would be greatly appreciated!

    Cheers,


    Andy

    #2
    You are not in a position to "put your foot down" because the existing owner can sell to whomever they wish.

    The Leasehold Reform Act 1993 gives lessees the right to extend their lease by a minimum of 90 years. Recommend that you look at the Leasehold Advisory Service website as a starting point.

    There isn't a problem per se if you buy a lease which has 76 years unexpired. I don't actually think you have a problem here at all. By virtue of the fact that you will purchase a share of the freehold and the other lessees also own an equal proportion of the freehold, when y'all decide to extend your leases you will all pay one third of the legal cost. Matters such as eligibility, valuation, marriage value are irrelevant because there's no need to convince the freeholder because you already are the freeholder!

    You want to avoid coming across to the existing owner as not knowing what your rights are in this particular set of circumstances and not appreciating/understanding this perfectly viable situation. Believe me, you are not in a disadvantaged position in this particular purchase.

    You should be more concerned, in my opinion, that all three lessees can agree on the big things such as maintenance of the building.

    Do some research and see if I'm not wrong.

    Comment


      #3
      Hi Poppy,

      Many thanks for taking the time to reply - much appreciated.


      Andy

      Comment


        #4
        Originally posted by Poppy View Post
        You are not in a position to "put your foot down" because the existing owner can sell to whomever they wish.

        The Leasehold Reform Act 1993 gives lessees the right to extend their lease by a minimum of 90 years. Recommend that you look at the Leasehold Advisory Service website as a starting point.

        There isn't a problem per se if you buy a lease which has 76 years unexpired. I don't actually think you have a problem here at all. By virtue of the fact that you will purchase a share of the freehold and the other lessees also own an equal proportion of the freehold, when y'all decide to extend your leases you will all pay one third of the legal cost. Matters such as eligibility, valuation, marriage value are irrelevant because there's no need to convince the freeholder because you already are the freeholder!

        If you can't procure their co-operation, you could individually extend by 90 yrs but this would need court order to cover reluctant participant. Get your V to serve s.42 Notice and assign it to you, in case you need it.
        You want to avoid coming across to the existing owner as not knowing what your rights are in this particular set of circumstances and not appreciating/understanding this perfectly viable situation. Believe me, you are not in a disadvantaged position in this particular purchase.

        You should be more concerned, in my opinion, that all three lessees can agree on the big things such as maintenance of the building.

        Do some research and see if I'm not wrong.
        I agree that there's no insuperable problem in buying 76 yr lease- but inevitably its shortness inflates val. of f/r. If collective lessees already own f/r, you must make sure that you acquire a share in it when you acquire leasehold. All of you can then jointly arrange sureenders/ re-grants for 999 yr terms.
        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


          #5
          (2nd reply)
          Still ask your V to serve s.42 Notice and assign it to you. This protects you in case other lessees won't cooperate in all extending all leases eg to 999yrs.
          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


            #6
            Talk to the other lessees also to check a) their attitude and b) that they are the people that own the freehold and there isn't a missing freeholder!

            Unfortunately this does happen - see the threads referred to in: http://www.houseweb.co.uk/house/foru...ML/000278.html
            RICHARD WEBSTER

            As a conveyancing solicitor I believe the information given in the post to be useful (provided it relates to property in England & Wales) but I accept no liability except to fee-paying clients.

            Comment

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