Urgent info needed on Lease Renewal/Ground Rent increase.

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    Urgent info needed on Lease Renewal/Ground Rent increase.

    Hi,

    I'm in the process of renewing my lease on my 1 bed flat worth around £130,000. However I need some advice on whether the terms suggested by the freeholder seem reasonable.

    I have 64 years remaining on my lease.
    I currently pay £45 ground rent pa.
    The freeholder has quoted me £12,000 to renew to a 99 year lease. I am told this is reasonable, however the freeholder has not given me any information on how he came to this price.
    Within the quotation are a number of terms, including:
    • Ground rent to increase to £250 pa. (Doubling at 25 year intervals.)
    • Payment of their fees equal to £475 + VAT.
    • Payment of client's legal costs. (This is where my lack of knowledge of the area shows! I do not know if the client in this case means myself, or a client that they are acting on behalf of)


    Does this sound correct or is my lack of thorough understanding being exploited?

    Thank you in advance to anyone that can offer any insight,

    James.

    #2
    Doesn't sound great to me.

    You will probably be better off going along the statutory route to extend your lease by 90 years at peppercorn (nil) rent.
    As long as you and the building qualify, there are some exemptions

    Check out- http://www.lease-advice.org/publicat...ent.asp?item=8

    From what you have said you should be looking around £11k to £13k plus valuation and legal fees, yours and landlords around £2k to £3k.

    Comment


      #3
      Would I be looking at paying a higher initial amount than the £12,000?

      So I should be expecting a total outlay to be around £15,000 if I continue on the route set by the freeholders?

      Thanks for your help!

      Comment


        #4
        I find a good yardstick is to say

        "looking around can I find a similar flat ( assuming the flat and block are in good order) on £250 a year, for 99 years, for £142000?"

        If so, then it adds up, if not then the offer price is likely wrong and that of course changes the premium calculation
        Based on the information posted, I offer my thoughts.Any action you then take is your liability. While commending individual effort, there is no substitute for a thorough review of documents and facts by paid for professional advisers.

        Comment


          #5
          I guess it also depends on what your plans are, if you are planning to sell, then the 99 year lease will be plenty for any buyer, but if you plan to stay put then go the statutory route as in 17 years you will be extending again.

          Comment

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