Leashold extension- 74 yrs left on flat lease

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    Leashold extension- 74 yrs left on flat lease

    I am currently selling my 2 bed leasehold flat and at the last minute the issue of the leasehold has cropped up.
    There are 74 years left on the leasehold and the buyer is saying that they want it extending back up to 99 years or they will pull out of the purchase.
    Is extending the leasehold simple process?
    How long does it take?
    How much does it cost?
    Any other advice on this matter would be greatfully recieved.

    #2
    Originally posted by Linaker View Post
    I am currently selling my 2 bed leasehold flat and at the last minute the issue of the leasehold has cropped up.
    There are 74 years left on the leasehold and the buyer is saying that they want it extending back up to 99 years or they will pull out of the purchase.
    Is extending the leasehold simple process?
    How long does it take?
    How much does it cost?
    Any other advice on this matter would be greatfully recieved.
    1. Have you owned flat for >2 yrs?
    2. If so, you have a legal right to add 90 yrs to existing term.
    3. Procedure is not too difficult (provided that L and T agree price).
    4. Instruct your solicitor to serve a Notice under s.42 of Leasehold Reform Housing and Urban Development Act 1993. That proves your right to extend and should stir the L into responding- maybe quickly, maybe not.
    5. Price is negotiable but there is a complex formula which suggests a figure. Other posters (sglacy?) may be willing to help on this.
    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
      Linaker,

      Lease Extensions can be straightforward if agreement can be reached between the leaseholder and freeholder. Otherwise, you may need to compel the freeholder to sell you a ninety year lease extension using the statutory process. This can take anything up to nine months from start to finish.

      I suggest you obtain a statutory lease extension valuation to provide to the buyers as your first step. If you proceed using the statutory route, you can serve the official Notice on your freeholder and then transfer it to the buyers once it is registered against the freehold title.

      For more information on statutory lease extensions, click here:-
      http://www.proleagle.com/leaseextension.htm

      I hope this assists.

      Kind regards,


      CORINNE TUPLIN
      SOLICITOR
      PRO-LEAGLE
      www.proleagle.com
      CORINNE TUPLIN
      SOLICITOR
      PRO-LEAGLE
      www.proleagle.com

      ___________________
      Please note that any comments made are personal opinion and do not constitute legal advice.

      For Service Charge Disputes, you may wish to use Pro-Leagle's online Service Charge Dispute Analyser: http://www.proleagle.com/servicecharges.htm

      Comment


        #4
        As far as the cost of a lease extentsion is concerned I would estimate the cost to be as follows:-

        1) Take the current ground rent and unless there are very substantial rises in the future take 15 times that annual rent.

        2) Estimate what the value of the flat would be with a long lease and zero ground rent and divide it by 37

        (For info to others: if the lease had 79 use 47.2, if 78 yrs use 45, if 77 use 42.8, if 76 yrs use 40.8, if 75 yrs use 38.8, if 74 use 37, if 73 yrs use 35.2, if 72 yrs use 33.5, if 71 yrs use 31.9, if 70 yrs use 30.4)

        3) Take the value of the flat in step 2 and instead of dividing by 37 take 6% of that figure (if in London) and deduct the amount shown in step 1 and step 2. If positive take 50% of that figure. If the flat outside London use 4% instead of 6%

        (For info to others: If the lease term is 80 yrs plus use 0% if the lease term is 79,78 or 77 yrs use 3% and for each year less than 77 yrs add 1% so 74 becomes 6%. For outside london take 60% of the London figuer.

        The cost of a lease extentsion would be the sum of all three steps.

        This is VERY APPROXIMATE but gives a flavour of what it might cost. Bear in mind there would be the Landlords costs of the surveyor and the legal costs of drafting the deed of surrender and re-grant.

        Obviously try and see if you can do a deal outside the ACT. From a landlords perspective there is an advantage to him if you go under the Act in that he can rollover the capital gain. I suggest if you can agree terms with the freeholder that you suggest that you would formerly serve notice on him on the understanding that he did not appoint a surveyor and you have in place a limit for the leagal cost.
        Last edited by sgclacy; 22-05-2007, 10:52 AM. Reason: Bad spelling!

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