Unequal Leases in a freehold company

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    Unequal Leases in a freehold company

    Please excuse me as I am a new member and wasn't sure if my question is already answered in other threads - if so please direct me to the answer.

    I am a flat owner (since 1988) in a converted building which includes 8 flats. There were 75 years left in the lease at the time of purchase. In 1990 the freeholder offered to extend all leases to 125 years at different fees depending on the size of the flat. In my case it was £2100 (for a one-bed flat). Of the 8 flats 2 (including me) didn't take the offer as we couldn't afford it. Then in 1993, the freeholder offered to sell the freehold to all 8 flats and this time I took the offer and in all 6 flats purchased the freehold, each having 1/6 of the total share. Although 4 of the shareholders were on longer leases than the other two, we all paid the same amount of fees (£1200) to purchase the freehold.

    So at present we have 4 flats in the freehold company with four of them having about 107 years left in their leases and two of them (including mine) with only 54 years left. Now, the other short lease flat wants to sell her's quickly and needs to extend her lease. Based on her solicitor's advice (which is highly questionable) she has obtained a marriage valuation of around £30,000 to bring the lease to 999 years. In a recently held shareholders meeting she has asked and obtained agrrement from all shareholders, except me, for a concessionary fee of £10,000 (in recognition of her management work for the compay) to bring her lease up to 107 years - the same as the other 4 shareholders. The reason I have withheld my vote is that I was advised by LEASE (Lease Advisory Service) that no fees were required to be paid and the extnsion can be done free of any payments apart from the legal costs. Now if the rest of the shareholders agree with £10,000 for the other flat, will it set a precendence for my flat or is this whole exercise flawed and the short lease flats can get away with paying nothing or a minimal amount of fees to have their leases extended. Thank you.

    #2
    Statutory extension right is to add 90 yrs extra only. A 999 yr term would obviously increase premium (purchase price).
    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


      #3
      Unequal Leases

      Thank you very much for your quick reply Jeffrey. I was wondering if the freehold compnay in which I am a shortlease shareholder are within their (legal) rights to ask me to pay a premium for having my leases extended to the same length as that of the longlease shareholders?

      Many thanks

      Ned

      Comment


        #4
        Originally posted by Ned_B View Post
        Thank you very much for your quick reply Jeffrey. I was wondering if the freehold compnay in which I am a shortlease shareholder are within their (legal) rights to ask me to pay a premium for having my leases extended to the same length as that of the longlease shareholders?

        Many thanks

        Ned
        Yes, in general terms. You have stautory rights to +90 yrs.
        If you negotiate different deal, to +999 yrs., premium would obviously be greater. Consult your surveyor/valuer re most cost-effective way forward.
        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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