Lease extension

[thainy77]

I'm after a bit of advice regarding a lease extension on a flat i am currently selling.

All searches etc. have been completed and the lease is currently at 75 years but the potential buyer would like this extended to 99 years. This was only brought to my attention yesterday and the buyer has stated they must complete by March 31st or they would pull out.

So.... does anyone have a rough idea of how long this extension would take before i part with my hard earned? i am fairly sure there will be no issues as the lease extension on an adjoining building was successful last year but three weeks seems like it may be cutting it close.

I have spoken with the solicitors extending the lease so i'm just asking for peace of mind really.

Edited by thainy77 on Tuesday 8th March 14:30

[Planet Claire]

Loads of information on this website - plus a calculator for you to plug in values to give a rough estimate on likely costs. http://www.lease-advice.org/calculator/

My flat had about 73 years and it was going to cost the best part of £20k to extend by the 90 years. Good luck with the sale.

[Sir Bagalot]

And they're just asking this now?

Assume original was 99 or 125 years? No Freeholder will issue you a 999 year lease on that basis. And it won't happen in 3 weeks.

Personally I would look into buying the Freehold

[thainy77]

Thanks for the info, i didn't realise it would be quite so expensive so even more reason to think about it, especially if the time line is questionable.

And yes, they are only asking now, i do have an ace up my sleeve though, they are currently renting the flat so i could be a tt if the need arises.

I have edited my initial post, it should have read 99 years.

Edited by thainy77 on Tuesday 8th March 14:32

[nikaiyo2]

thainy77 said:

All searches etc. have been completed and the lease is currently at 75 years but the potential buyer would like this extended to 99 years. This was only brought to my attention yesterday and the buyer has stated they must complete by March 31st or they would pull out.

Edited by thainy77 on Tuesday 8th March 14:30

I bet they do, I would imagine the value the property was marketed at was based on it having 73 years remaining on the lease. The value with 99+ years would in most cases be SIGNIFICANTLY more.

[thainy77]

nikaiyo2 said:

thainy77 said:

All searches etc. have been completed and the lease is currently at 75 years but the potential buyer would like this extended to 99 years. This was only brought to my attention yesterday and the buyer has stated they must complete by March 31st or they would pull out.

Edited by thainy77 on Tuesday 8th March 14:30

I bet they do, I would imagine the value the property was marketed at was based on it having 73 years remaining on the lease. The value with 99+ years would in most cases be SIGNIFICANTLY more.

This is what is annoying me but i'm remaining calm, for now.

[elvismiggell]

Did your agent not mention this when they did your valuation? There's a real bias against anything with less than 99 years that will make it harder to sell / get a fair price for it.

[Shaoxter]

I bought a flat recently which had around 80 years remaining, this was made abundantly clear in the marketing. The sellers had got a quote for an extension already (~£8k to 125 years) and were willing to extend the lease as part of the sale if I paid the asking price, which I did.

Even then it took much longer than 3 weeks for everything to be sorted, you've got no chance of extending the lease and completing by the end of this month. Their threat of pulling out seems a bit empty since it sounds like they'll be paying another 3% in stamp duty (either on yours or another property) if they don't complete by 31 March!

[S26VE P]

We are in the process of extending a lease before we sell for this reason. So far we put the ball in motion in December and have yet to complete it for an idea of our timeframe.

[Willhire89]

You must also have owned the property for two years before you can apply to extend the lease - otherwise the leaseholder will not have to do a deal.

There are many variants to extending - some add on 99 years some go back to their original 125 or 99

In my view this is a purchaser looking to steal a few quid on something they already understood and it would certainly never be sorted by 31/3 anyway.

[ozzuk]

As a backup have you issued (I think its called) a Section 21? Might help focus their attention as you'll find it very difficult to sell on with tenants there if sale falls through.

[tony wright]

Not to put a dampener on it, but I started the lease ext on a flat I own in Oct 2014 and received a letter from solicitor today saying it's still on going. I paid the full amount of £8k and all my solicitors bills by July last year but my legal guy says apparently the freeholder is in dispute with his bank (something to do with him keeping it and the bank thinking he should of paid it off his mortgage) so I'm still waiting for conclusion

[thainy77]

Thanks all for the info, i'm not desperate to sell, i no longer live in the UK so it was just one less hassle to worry about.

I'll tell them it's a no go and see if they were bluffing, then if they pull out i will be looking for new tennants .

[daytona355]

Tell them to get lost, there are several mortgage companies who will lend with a term that expires prior to the point where the lease has only 40 years left on it, so they can get a 32/33 year mortgage without issues. If their financial adviser won't do it for them, I will!

The estate agent needs to get on to the buyer and explain the facts of life to them, you don't extend leases within 3 weeks, and it isnt cheap. If you want it done, you pay for it as the buyer when there is no good reason. They can do it themselves when they own it. This is all moneybox or Martyn Lewis generated aggro I suspect, they've been reading the Internet too much!

[nikaiyo2]

thainy77 said:

Thanks all for the info, i'm not desperate to sell, i no longer live in the UK so it was just one less hassle to worry about.

I'll tell them it's a no go and see if they were bluffing, then if they pull out i will be looking for new tennants .

You would, IMHO, be much better off getting rid of these tenants, getting new tenants in who do not expect to buy the place, extending the lease to 99-125 whatever is most sensible/ doable. Then putting on the market with an new lease.

I know round this neck of the woods (Southcoast) I would be expecting to see a 20-30% reduction (at least) in asking price for a 70 year lease property over a 125 year lease.

[Rangeroverover]

I would get your agent to have a conversation with the buyer along the lines of

The lease extension to 99 years will cost £xxxx, this will be added to the purchase price on which you will pay stamp duty even pre April 1st, sensible option is complete the purchase prior to April 1st then extend the lease yourself.

There is no chance even if both sides are obstacle free and have lawyers who actually get on with it to extend the lease before month end