Renewing lease when you have a share of the freehold
Discussion
I think the freehold agreement states the cost of a lease renewal, I think mine is £200 + costs. I assume the £200 goes to the freehold company and is then used toward the property in the future.
Never had to do it, but from what I understand a lot of the benefit of the share-of-freehold arrangement is that it's cheap to renew the lease.
Never had to do it, but from what I understand a lot of the benefit of the share-of-freehold arrangement is that it's cheap to renew the lease.
It is unlikely your lease (I presume that is what you mean by Freehold Agreement) will state the cost of extension.
In essence you are both the leaseholder and freeholder. So you as freeholder grant yourself as lessee an extension and you do it usually up to a length of 999 years. Yes, you will need to pay a solicitor to sort the paperwork. It should be in the low hundreds if you are outside London.
You may also need to speak to an accountant regarding how you account for the "consideration" for the lease extension. In essence you will be increasing the value of the property by extending the lease. If it is your main residence, no problem probably. However, if it is an investment there may be a nominal capital gain to consider. But I am not expert in that area!
If you want to speak to a solicitor that is expert in this area then go to the Association of Leasehold Enfranchisement Practitioners web site (www.alep.org.uk) to find a local person.
An ancillary point is that you will not be able to change your lease and probably don't need to anyway. However, you may want to consider the value of the ground rent. If it is low, all the lessees can agree an increase, this is then paid into the freehold (nominee purchasor) company and you can use this money for corporate running costs, directors and officers insurance, accounts filing, etc.
In essence you are both the leaseholder and freeholder. So you as freeholder grant yourself as lessee an extension and you do it usually up to a length of 999 years. Yes, you will need to pay a solicitor to sort the paperwork. It should be in the low hundreds if you are outside London.
You may also need to speak to an accountant regarding how you account for the "consideration" for the lease extension. In essence you will be increasing the value of the property by extending the lease. If it is your main residence, no problem probably. However, if it is an investment there may be a nominal capital gain to consider. But I am not expert in that area!
If you want to speak to a solicitor that is expert in this area then go to the Association of Leasehold Enfranchisement Practitioners web site (www.alep.org.uk) to find a local person.
An ancillary point is that you will not be able to change your lease and probably don't need to anyway. However, you may want to consider the value of the ground rent. If it is low, all the lessees can agree an increase, this is then paid into the freehold (nominee purchasor) company and you can use this money for corporate running costs, directors and officers insurance, accounts filing, etc.
Edited by Leasehold Advice on Tuesday 20th April 17:19
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