Freehold Purchase & Lease Extensions
Have you thought about buying the freehold of your house or extending the lease of your flat?
When the lease of your house or flat reaches 80 years, it is likely that you will have difficulty in selling the property for its full market value without either buying the freehold or extending the length of the lease. (It is not practical to buy the freehold of an individual flat).
Our clients are always happy to consider selling their freehold interest in your house or extending the lease of your flat and the following information is likely to be helpful to you if you are considering this.
If you would like an illustration of the terms under which our clients will sell their interest in your property, you should complete an application form here.
We make a modest charge for providing the illustration given the time it takes us to calculate and produce the illustration. Our fee depends on whether there are 80 or more years left on the lease. For houses with over 80 years out charge is £50 and for those with less than 80 years our charge is £700. Once we receive your application we will confer with our clients, assess the value of the freehold and send to you a written illustration of the terms. This will set out clearly the costs involved. We make it a condition that illustrations are only guaranteed for a period of two months from the date they are given and subject to our client’s authority to proceed if you decide to accept it. In some cases we may need to arrange an inspection of your property before we can provide the illustration. Our clients also make it a condition that the purchase must be completed within a period of eight weeks for the terms to apply and within four weeks of the date of your legal representative receiving the legal documents. It is also a condition of any agreement to sell that the terms of your lease are being complied with, and that the ground rent has been paid to date.
Extending your lease
Where the lease of your flat has less than 80 years unexpired, the market value of it will be considerably reduced and you may have difficulty in finding a buyer who can raise a mortgage on it. Our clients will consider extending the lease of the flat provided the terms of your lease have been complied with and the ground rent and any service charges are fully paid up to date. If you would like an illustration, you should complete the application for a lease extension which you can find here.
If the lease has less than 80 years remaining on the lease (and we can provide that information if you email us a request) you will need to obtain a valuation from a local estate agent confirming the current market value of the flat – on the basis that the lease has already been extended. Upon receipt of that from you we will then prepare an illustration of the cost of extending the lease. Our fee for providing the illustration is £150
Where the lease has less than 80 years unexpired, the fee for providing the valuation is greater than where the lease has more than 80 years unexpired, given the additional work involved. The cost is £700. Once terms have been agreed our client’s solicitor will forward to your legal representative, a draft of the new lease and it is a condition of the offer that completion takes place within eight weeks of the original cost illustration. This is because the shorter the lease, the larger the premium you pay to extend it and so once we have provided the illustration we recommend that you proceed to accept it and instruct your legal adviser, without delay
If we collect a rent charge on your house, our clients are willing to consider redeeming it so that you no longer have to pay.
You will need to complete an application form to redeem the rent charge and you can find the form here.
There are two ways of doing this. Our clients can legally transfer the ownership of the rent charge to you so that any reference to it will be removed from the title deeds to your house. This is the preferred method because it’s likely to avoid problems when you come to sell or mortgage the house but the cost of doing so is more because it involves more work. This is called buying out the rent charge. The fee for providing the illustration is £40.
Alternatively, you can redeem the payment of the rent charge meaning that for a capital sum, our clients will no longer demand payment of the rent charge until it expires under the provisions of the law. Although this is a cheaper method, the title deeds to your house will not be amended and will still show that it is subject to a rent charge payment. Our fee for giving you the cost illustration is £10.
The above is intended only to be an outline for practical help and is not an illustration or statement of the law. If you have any doubt about your position, we suggest that you seek independent advice before proceeding.
Are you thinking of selling, remortgaging or subletting your home? Are you thinking of extending or altering it?
Where your lease prohibits the property from being sublet, transferred to a new owner, or mortgaged to a new lender, you should apply for our consent by completing the form here.
There is a fee payable for this service and you can find details of the relevant amount on our fees page.
Please complete the form and send it to us and make the payment and we will then confirm to you that we are dealing with it and the likely time it will take to respond. In most cases we can provide consent within 10 working days.