Purchasing Property with < 50 years Leasehold

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    Purchasing Property with < 50 years Leasehold

    Hi there,

    I currently own a property in a building with has 14 flats, where the freehold is held by the 14 property owners. We have formed a company to manage the freehold and the property and all property owners are directors. The leasehold on my flat is 999 years, starting from 1964.

    Recently, another flat in the building has been re-possessed and is coming up for sale. When speaking to the estate agents, they told me that the leasehold on this flat was only 50 years. Having gone onto the land registry site, it appears that the freehold is held by our collective company (and 4 flats in the block have don't have the 999 year leasehold which I have for my current property).

    My question is therefore regarding whether I would be able to extend the leasehold on the property should I purchase the flat? Would I have to make an offer to the directors of the company (of which I am one) to extend the leasehold to 999 years and how much is this likely to cost? I assume that the other property owners would see this as an unexpected windfall?

    If the leasehold of the 4 flats were not extended in the next 50 years, would the ownership of the lease transfer to the other 10 property owners (as directors of the company owning the freehold?)

    Apologies for so many questions, I can't find a comparable situation on any other threads.

    cheers,
    Bill

    #2
    There will be a lot of value in extending the lease which then will be distributed between the 14 shareholders.

    Work out how much it is worth and then decide if you are prepared to pay for it.

    Comment


      #3
      Originally posted by wjday View Post

      If the leasehold of the 4 flats were not extended in the next 50 years, would the ownership of the lease transfer to the other 10 property owners (as directors of the company owning the
      Yes, but chances are most would extend

      Comment


        #4
        The leaseholder of the flat with 50 years remaining on the lease can seek a statutory extension of 90 years at peppercorn ground rent = 140 years at Nil ground rent.

        There is no statutory right to demand an extension to 999 years.

        But after you obtain a 90 years statutory lease extension at Nil ground rent, you should be OK for next 59 years before you need to worry about seeking lease extension.

        Comment

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