Short lease on flat issue
Discussion
Not much of a poster but an avid follower of the forum.
To start out I will say we are actually seeking legal advice but I want to see if anyone has been through this before and what outcomes there have been. I have no idea how this will pan out.
My girlfriend bought her flat 5 years ago and has just come to renew mortgage and change provider to a better deal. Their legal team have pointed out a short lease on the property which my girlfriend wasn’t aware of. She provided them details of the long lease extension done in 2007 but they came back and said it wasn’t that one, it was the second title. She didn’t realise there were two titles on the property and one hasn’t been extended when the other one was by previous owners. Therefore mortgage company have said no and she’s stuck with the current mortgage lender for now.
However, if this is an issue we fail to see how she got a mortgage in the first place?
The short lease is actually only on the garden, not the property and is currently 40 years!
This wasn’t pointed out at any stage by the solicitors at the time to my girlfriend as if they had, she wouldn’t have purchased at full asking price until it was extended.
If in my job I had pointed out something where I recommend against purchasing with a short lease (which surely they should have?) and the client had proceeded anyway I’d have covered my back by getting a disclaimer signed in case of the client ever coming back. Would it be reasonable to expect the solicitor to have done something like this as she doesn’t have any paperwork or remember ever being advised of the short lease or against proceeding with the purchase?
There is obviously a big cost to the fees and the cost of extending the lease and I’d like to know thoughts about who is liable for this as I just can’t imagine anyone should know the legal ins and outs about titles and how many leases, surely that’s the solicitors job?
Sorry for the long rambling post. I’ll try my best to answer any questions promptly.
Dave.
To start out I will say we are actually seeking legal advice but I want to see if anyone has been through this before and what outcomes there have been. I have no idea how this will pan out.
My girlfriend bought her flat 5 years ago and has just come to renew mortgage and change provider to a better deal. Their legal team have pointed out a short lease on the property which my girlfriend wasn’t aware of. She provided them details of the long lease extension done in 2007 but they came back and said it wasn’t that one, it was the second title. She didn’t realise there were two titles on the property and one hasn’t been extended when the other one was by previous owners. Therefore mortgage company have said no and she’s stuck with the current mortgage lender for now.
However, if this is an issue we fail to see how she got a mortgage in the first place?
The short lease is actually only on the garden, not the property and is currently 40 years!
This wasn’t pointed out at any stage by the solicitors at the time to my girlfriend as if they had, she wouldn’t have purchased at full asking price until it was extended.
If in my job I had pointed out something where I recommend against purchasing with a short lease (which surely they should have?) and the client had proceeded anyway I’d have covered my back by getting a disclaimer signed in case of the client ever coming back. Would it be reasonable to expect the solicitor to have done something like this as she doesn’t have any paperwork or remember ever being advised of the short lease or against proceeding with the purchase?
There is obviously a big cost to the fees and the cost of extending the lease and I’d like to know thoughts about who is liable for this as I just can’t imagine anyone should know the legal ins and outs about titles and how many leases, surely that’s the solicitors job?
Sorry for the long rambling post. I’ll try my best to answer any questions promptly.
Dave.
Dave, don't apologise for the long rambling post, read it to yourself and think about what you want to say, what you want people to answer, then edit your post and tailor it to your audience.
If you have to apologise for stuff before anyone's called you out on it, you know you've done it wrong. Have another go.
If you have to apologise for stuff before anyone's called you out on it, you know you've done it wrong. Have another go.
Hopefully it is all ok, clear and factual.
I just know how some posters reply on here having followed it for so long. All I’m trying to find out is who is liable to cover costs of extending the lease, for each part of the costs based on others experience of going through this as we can’t be the first to have this happen.
I just know how some posters reply on here having followed it for so long. All I’m trying to find out is who is liable to cover costs of extending the lease, for each part of the costs based on others experience of going through this as we can’t be the first to have this happen.
My other half is a conveyancing solicitor. Just asked her about it.
She says only option your GF has is to extend the garden lease. It shouldn't be too expensive. Go onto Google and use a Lease Extension Calculator.
She suggests contacting the previous solicitor who acted in the purchase and give them a chance to look into it and to see why this wasn't picked up when she purchased the property. Ask if they can assist in solving the issue as the lease will need to be extended (May get a discounted rate etc).
Different mortgage firms use different processes, most require the acting solicitors though to provide the information. It either wasn't provided by the solicitor or the particular lender has different requirements to your new lender. The general rule now is anything below 80 years needs an extension.
She says only option your GF has is to extend the garden lease. It shouldn't be too expensive. Go onto Google and use a Lease Extension Calculator.
She suggests contacting the previous solicitor who acted in the purchase and give them a chance to look into it and to see why this wasn't picked up when she purchased the property. Ask if they can assist in solving the issue as the lease will need to be extended (May get a discounted rate etc).
Different mortgage firms use different processes, most require the acting solicitors though to provide the information. It either wasn't provided by the solicitor or the particular lender has different requirements to your new lender. The general rule now is anything below 80 years needs an extension.
I don't have specifics on your issue but we have to renew the lease on our flat because the ground rent is high, the years are actually fine.
Mortgage lenders (and their valuers) have absolutely cracked down on any onerous terms in a lease due to these leasehold scandals in the press.
Does she have a share of freehold on the property (if so it will just be an admin excercise hopefully). If another company owns it, you'll probably have to do a statutory lease extension on it.
Seems weird having a separate lease on the garden. My flat has a garage in a block, a garden not connected either and it's all under 1.
Mortgage lenders (and their valuers) have absolutely cracked down on any onerous terms in a lease due to these leasehold scandals in the press.
Does she have a share of freehold on the property (if so it will just be an admin excercise hopefully). If another company owns it, you'll probably have to do a statutory lease extension on it.
Seems weird having a separate lease on the garden. My flat has a garage in a block, a garden not connected either and it's all under 1.
CoreyDog said:
My other half is a conveyancing solicitor. Just asked her about it.
She says only option your GF has is to extend the garden lease. It shouldn't be too expensive. Go onto Google and use a Lease Extension Calculator.
She suggests contacting the previous solicitor who acted in the purchase and give them a chance to look into it and to see why this wasn't picked up when she purchased the property. Ask if they can assist in solving the issue as the lease will need to be extended (May get a discounted rate etc).
Different mortgage firms use different processes, most require the acting solicitors though to provide the information. It either wasn't provided by the solicitor or the particular lender has different requirements to your new lender. The general rule now is anything below 80 years needs an extension.
Thank you. She says only option your GF has is to extend the garden lease. It shouldn't be too expensive. Go onto Google and use a Lease Extension Calculator.
She suggests contacting the previous solicitor who acted in the purchase and give them a chance to look into it and to see why this wasn't picked up when she purchased the property. Ask if they can assist in solving the issue as the lease will need to be extended (May get a discounted rate etc).
Different mortgage firms use different processes, most require the acting solicitors though to provide the information. It either wasn't provided by the solicitor or the particular lender has different requirements to your new lender. The general rule now is anything below 80 years needs an extension.
We have contacted the previous solicitor and she says she ‘would have mentioned it’ although as it was 5 years ago can’t be sure. She has offered to waive her fee for the extension but other than that being vague and doesn’t have any notes or replies from the mortgage lender at the time accepting the short lease.
My honest opinion is that they should be liable for the cost of extending it if they didn’t advise it in the first place as my GF would have got it extended by the previous owner before completion had she known about it. As it stands this could cost us quite a bit.
I’ll have a look at the lease extension calculator as I have no idea what to expect currently.
joropug said:
I don't have specifics on your issue but we have to renew the lease on our flat because the ground rent is high, the years are actually fine.
Mortgage lenders (and their valuers) have absolutely cracked down on any onerous terms in a lease due to these leasehold scandals in the press.
Does she have a share of freehold on the property (if so it will just be an admin excercise hopefully). If another company owns it, you'll probably have to do a statutory lease extension on it.
Seems weird having a separate lease on the garden. My flat has a garage in a block, a garden not connected either and it's all under 1.
No share of the freehold unfortunately.Mortgage lenders (and their valuers) have absolutely cracked down on any onerous terms in a lease due to these leasehold scandals in the press.
Does she have a share of freehold on the property (if so it will just be an admin excercise hopefully). If another company owns it, you'll probably have to do a statutory lease extension on it.
Seems weird having a separate lease on the garden. My flat has a garage in a block, a garden not connected either and it's all under 1.
It does seem weird and we’ve never heard of it before. It appears as it was 2007 when the person she bought it from bought it and it wasn’t extended with the property then, a few solicitors seem to have missed it!
davejf said:
Thank you.
We have contacted the previous solicitor and she says she ‘would have mentioned it’ although as it was 5 years ago can’t be sure. She has offered to waive her fee for the extension but other than that being vague and doesn’t have any notes or replies from the mortgage lender at the time accepting the short lease.
My honest opinion is that they should be liable for the cost of extending it if they didn’t advise it in the first place as my GF would have got it extended by the previous owner before completion had she known about it. As it stands this could cost us quite a bit.
I’ll have a look at the lease extension calculator as I have no idea what to expect currently.
Other half says the fact she has agreed to waive the fees is good but you should be aware that you're not only responsible for your legal and valuation fees but also those of the freeholder. There is also a premium to pay and land registry fees but you should ask that the solicitor be responsible for the registry fees. We have contacted the previous solicitor and she says she ‘would have mentioned it’ although as it was 5 years ago can’t be sure. She has offered to waive her fee for the extension but other than that being vague and doesn’t have any notes or replies from the mortgage lender at the time accepting the short lease.
My honest opinion is that they should be liable for the cost of extending it if they didn’t advise it in the first place as my GF would have got it extended by the previous owner before completion had she known about it. As it stands this could cost us quite a bit.
I’ll have a look at the lease extension calculator as I have no idea what to expect currently.
Also note the time frame and whether your new mortgage offer has an expiry date as there are two ways to extend and if you extend formally this can be a lengthy process. It maybe worth making an informal approach to the freeholder directly as this can be completed faster as it's not governed by the statutory time frame so can be concluded more swiftly which will reduce costs.
Edited by CoreyDog on Thursday 18th July 20:36
CoreyDog said:
Other half says the fact she has agreed to waive the fees is good but you should be aware that you're not only responsible for your legal and valuation fees but also those of the freeholder. There is also a premium to pay and land registry fees but you should ask that the solicitor be responsible for the registry fees.
Also note the time frame and whether your new mortgage offer has an expiry date as there are two ways to extend and if you extend formally this can be a lengthy process. It maybe worth making an informal approach to the freeholder directly as this can be completed faster as it's not governed by the statutory time frame so can be concluded more swiftly which will reduce costs.
Yes we have been told we will have to cover freeholders costs too plus the others.Also note the time frame and whether your new mortgage offer has an expiry date as there are two ways to extend and if you extend formally this can be a lengthy process. It maybe worth making an informal approach to the freeholder directly as this can be completed faster as it's not governed by the statutory time frame so can be concluded more swiftly which will reduce costs.
Edited by CoreyDog on Thursday 18th July 20:36
Unfortunately we don’t know who the freeholder is or how to contact them so we will have to go the long way round and the mortgage offer will expire in that time.
CoreyDog said:
My other half is a conveyancing solicitor. Just asked her about it.
She says only option your GF has is to extend the garden lease. It shouldn't be too expensive. Go onto Google and use a Lease Extension Calculator.
She suggests contacting the previous solicitor who acted in the purchase and give them a chance to look into it and to see why this wasn't picked up when she purchased the property. Ask if they can assist in solving the issue as the lease will need to be extended (May get a discounted rate etc).
Different mortgage firms use different processes, most require the acting solicitors though to provide the information. It either wasn't provided by the solicitor or the particular lender has different requirements to your new lender. The general rule now is anything below 80 years needs an extension.
I’ve googled the lease extension calculator but I don’t think I have all the information as if I put in the value of the property then I get a 25-33% of the property value as the premium which is a very big value! But as this lease is only on the garden, surely I should only be putting in the value of the garden, not the whole lot, but I have no idea what value the garden would be compared to the flat in the overall scheme of things She says only option your GF has is to extend the garden lease. It shouldn't be too expensive. Go onto Google and use a Lease Extension Calculator.
She suggests contacting the previous solicitor who acted in the purchase and give them a chance to look into it and to see why this wasn't picked up when she purchased the property. Ask if they can assist in solving the issue as the lease will need to be extended (May get a discounted rate etc).
Different mortgage firms use different processes, most require the acting solicitors though to provide the information. It either wasn't provided by the solicitor or the particular lender has different requirements to your new lender. The general rule now is anything below 80 years needs an extension.
davejf said:
Yes we have been told we will have to cover freeholders costs too plus the others.
Unfortunately we don’t know who the freeholder is or how to contact them so we will have to go the long way round and the mortgage offer will expire in that time.
Lizzie says go onto the Land Registry website and you can download a copy of the freehold title for £3 or the purchase solicitor should have the details already. Unfortunately we don’t know who the freeholder is or how to contact them so we will have to go the long way round and the mortgage offer will expire in that time.
CoreyDog said:
Lizzie says go onto the Land Registry website and you can download a copy of the freehold title for £3 or the purchase solicitor should have the details already.
Thank you. I think we have that as it gives a company name and contact name but I’ve run a check through companies house and the company named was dissolved a few years ago. Does that get updated with new details if the freeholder changes?davejf said:
Thank you. I think we have that as it gives a company name and contact name but I’ve run a check through companies house and the company named was dissolved a few years ago. Does that get updated with new details if the freeholder changes?
It's sounds like that maybe an old document and it should be updated with new details. Get a new copy of the title, it should have details of the freeholder.
You should bear in mind when doing your mental calculations about how much the conveyancer should pay your partner, that it isn't actually costing her anything. All the costs she is being asked to pay now, she would have had to pay (but didn't) when she bought the flat, so she isn't actually out of pocket.
That is likely to make anything more than a voluntary goodwill contribution quite a challenge.
That is likely to make anything more than a voluntary goodwill contribution quite a challenge.
hutchst said:
You should bear in mind when doing your mental calculations about how much the conveyancer should pay your partner, that it isn't actually costing her anything. All the costs she is being asked to pay now, she would have had to pay (but didn't) when she bought the flat, so she isn't actually out of pocket.
That is likely to make anything more than a voluntary goodwill contribution quite a challenge.
Surely that’s not right though as if she had been notified about the short lease she would not have bought it until the previous owner had extended the lease or paid the appropriate amount under asking price to cover these costs. That is likely to make anything more than a voluntary goodwill contribution quite a challenge.
That’s how I’ve always seen it done before. As with a short lease the property isn’t worth as much as it would be with a good length lease.
One of her neighbours has just sold their flat and had to extend the lease at their cost before the purchaser would continue.
hutchst said:
If mortgage lenders hadn't tightened up their rules in the 5 years since your girlfriend bought her lease(s) and she had remortgaged as she wanted without any problem, would she be bothered about extending a lease on a bit of garden?
She wouldn’t have known about it until she came to sell the property which then wouldn’t be worth as much with a short lease. So the problem would just have been highlighted later.The issue is surely the solicitor when she bought should have pointed this out and recommended she either got the previous owner to extend before completion or buying at a reduced price to reflect the cost of extending which she didn’t.
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