Lease extension

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  • Galatea
    started a topic Lease extension

    Lease extension

    We are 3 flats with unexpired 64 year leases. Each lessee has 1/3 share of freehold. We have a management company. Each lessee is a director. Each flat has a substantially different market value. The 2nd floor flat has the lowest value, mine on the first has middle and the groundfloor is by far the very dearest. So premiums should be paid according to a surveyor. I approached one lessee, the ground floor owner a few months ago about the extension but she refused to discuss. The other lessee has left without leaving a contact. Relations are generally very very poor between all three.

    Yesterday the groundfloor owner met with me and said she was intending to sell her property and she needed both me and the other lessee to sign ONLY for her own lease to be extended to 999 years. But said she would NOT sign an extension of my own lease and would NOT sign the extension of the other lessee either. I said this is unreasonable and leaves me and the other owner without extensions of our leases. I said there was no whatsoever incentive for us to sign and no way to conduct a business.

    I do not intend to sign somebody else’s lease extension when they refuse to sign mine. What would be the point? But what could be the outcome of that? Anyway I asked her to put into writing what she said.
    Thanks for replies

  • Galatea
    replied
    No I don’t understand what you mean. But do not worry. My Lawyer has explained to me well. Thanks.

    Leave a comment:


  • leaseholdanswers
    replied
    You still haven't grasped it, stop looking for zebras

    Leave a comment:


  • Galatea
    replied
    For erevry claim and contest there is a counter one.

    The other directors run same risk of being contested. No premium was paid to me and I do not see why they should take unfair advantage and demand from me a premium. I do not know why the other directors act so. Perhaps they might have wanted in exchange of granting me a lease to aloow them various benefits such as change in the Covenants...

    Leave a comment:


  • leaseholdanswers
    replied
    Well you have answered you own question havent you.

    If the premium for the other flat would be higher the company would have recieved a lot more of premium than your flat's and in turn your dividend, or other shareout, from that large flat would be larger than your proportional contribution to your premium.

    Say
    £300000 /3 shared by 3
    £250000 /3 shared by 3
    You £210000 /3 shared by 3

    Do the math.

    Leave a comment:


  • Galatea
    replied
    L/a have you seen such leases overturned? when and where?
    My Lawyer said that the other 2 directors can contest but it would not be easy for them. If I did not take risks the only option would be to offer a premium and pay summs I have to borrow or sell.

    The premium for my lease extension is extremely high (calculated by a surveyor recently) and it can be better put in other investments. I had found actually buyers for my property with the present lease.

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  • Galatea
    replied
    Thanks

    I do not see the point. It will be the same benefit as the other 2 directors granted to themselves. Same terms will apply. The other directors not only refused to grant me extention but they granted 999 years to themselves and on top of that asked me a premium in order to grant me a lease. Besides, the value of the director’s flats is a lot highr than mine.

    Leave a comment:


  • leaseholdanswers
    replied
    Well the lawyer is wrong- in this case you are granting yourself a considerable benefit with a lease extension, without any consideration which as a director in this situation you cannot.

    It can easily be overturned.

    Do it at your own risk.

    Leave a comment:


  • Galatea
    replied
    Thanks
    None of the other 2 directors will sign - this has been ongoing. The Lawyer has been instructed and says it can be done without the others signing.

    I do not know the motives of the others and sometimes personality problems develop.

    What worries me most is the sagging 2nd floor roof a frightful sight,my buyer lost his mortgage approval for this whereas the extension was less.

    Leave a comment:


  • freeholdlease
    replied
    yes but you can't sign a lease in your capacity as a tenant and then in your capacity as a director or company secretary - you have a right when you own a share in the freehold company to have granted to you a 999 year lease - simply get the deed of variation drafted and ask one of the directors to sign.

    Leave a comment:


  • Galatea
    replied
    I have now found a Lawyer who I am instructing and who suggested to prepare my Deeds for lease extension in the same terms the others. Only after your suggestion I found out that I could do it this way. I had not known that directors can execute Deeds signing themselves in the presence of a witness. It is now in the LR guides. Thanks again.

    Leave a comment:


  • Galatea
    replied
    sgclacy,

    Thanks for pointing to the Direction of executing a Deed of Variation myself. I now see that a Companies Act 2006 came to effect October 2009 that a Director can execute Deeds in the presence of an independent witness and in this way It appears I can execute the Deed myself.

    I asked my conveyancing Solicitor to check that and prepare DoV for me to xtend my lease.

    Thanks again because it is very useful advice.

    Leave a comment:


  • Galatea
    replied
    sgclacy

    thanks for your answers. I will speak to my conveyancer also about surrender and regranting a new lease. Lease extension and freehold can take up some months causes worry and stops people gettingon with their day to day life. When we had in this property a landlord and not a sf life was much easier.

    Leave a comment:


  • Galatea
    replied
    Thanks leasehold
    Glad a property solicitor would do, because my Deeds are kept with a conveyancer who I am going to use - but who is is not the same person as the company firm of solicitors. It is correct there is a value to my lease extension and besides one cannot fail to see there are overdue roof repairs but no service charge let alone no company bank account and one director says she cannot afford.

    Leave a comment:


  • leaseholdanswers
    replied
    Any property solicitor will do, and based on the earlier extensions the company likely already has its own.

    SGclacy is sadly incorrect as the orignal value and term is irrelevant but is correct in where there is a value to an extension and no earlier agreement ( all too common) on lease extensions, giving some for nil and some at a cost ( barring provisions as above or sale to a non participant) is wrong.

    Leave a comment:

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