If you own a flat, apartment or part of a building it is likely that you own a leasehold interest in that building. For example you may have purchased your flat from the first leaseholder in 2000 and at that time the lease had 80 years left to run. Travel forwards to now and you may wish to remortgage or sell your interest in your flat. Most banks and building societies will require the lease to have a minimum of 70 years from the date they grant you a new mortgage. Therefore if you are trying to remortgage your flat you will need a lease extension. If you are selling your flat you will need to have a lease extension otherwise only cash purchasers will be able to purchase your flat from you and this will drastically reduce the number of potential buyers for your property.
You will need to approach your immediate landlord, usually through his/her/it's managing agents for a request to extend your lease. The landlord will usually require you to pay for his reasonable surveyors fees up front so he can obtain a sale price known as the lease extension "premium". In our experience the surveyors fees and application fees can vary but are usually anywhere from £500- £1000.
The landlords agents will also give you an approximate price for the landlords legal advisers to draw up the deed of lease extension. Again the fees can vary here (£350 plus vat to £2000 plus vat).
Once the lease premium has been ascertained you will need to instruct a conveyancing firm or property law solicitors such as us to act on your behalf in receiving the deed of lease extension, approving, advising and reporting to you about the deed of lease extension and completing the deed, paying over to the landlord's solicitors your premium and registering the extended term with the Government's Land Registry.
Our fees for acting for you will depend on the value of the lease extension and whether we have to obtain the consent of your existing mortgage company or in the case of a remortgage we may have to liaise with its own legal advisers as well to approve the deed of lease extension.
On the completion date the Buyer's solicitor will send the funds to complete to the Seller's solicitor by same day telegraphic transfer. Once these are received completion occurs and the Seller's solicitor will call the estate agent to authorise them to release the keys. The Seller's solicitor will then redeem the mortgage if necessary and discharge any invoices (e.g. estate agents' commission) before forwarding the net sale proceeds as shown on the completion statement to the Seller. The Seller's solicitors will then send the transfer deed executed by the Seller to the Buyer's solicitors.
-The premium will be different in each case and you can expect to pay anywhere from £5,000 to £25,000 (but much more expensive where dealing with properties in high value areas of England and Wales).
- No. Whilst in most cases a premium is payable, sometimes you will own a share in a freehold company which in turn owns the building. In this case you may be lucky enough not to have to pay any premium.
- It is possible to pay for the landlord's surveyors and legal fees (typically £500 to £2000) and market your flat with the benefit of the lease extension. Provided you factor the lease extension premium into the sale price then the lease can be extended on the day the flat sale completes. Usually the purchaser will be granted the lease extension in his/her own name and will handle updating the flat's title information at Land Registry. TP Legal Solicitors offers a discount off its lease extension fees when the flat is being sold at the same time.
- It is very rare for a landlord to refuse to extend the lease. The premium is a very attractive proposition for a landlord. However there may be some instances where the landlord might refuse, for example if you have previously fallen out with your landlord, or the landlord believes that the amount of the premium is not high enough and would rather wait until property prices have risen and the lease has even less years left to run so the premium will rise. In these instances it may still be possible to require the landlord to grant you a lease extension provided you have owned your flat for at least 2 years and qualify under the statutory regime.
At TP Legal solicitors we can provide you with the expert legal advice to assist you with your lease extension.
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