Lease extension from 70 yrs - almost

[savvy100]

Hi,

I own a 1 bedroom flat in a purpose built block in east london. The lease is for 99 years from 24/06/80 has come down to 70 years and i would like to renew it. (as of 25/06/09 will be 69 years and counting). The freeholders of the property (nasty piece of work), who incidentally are also the managing agents contacted me inquiring if i wanted to extend the lease for a premium of £40k plus costs.

I had a valuation done last year in Oct by a surveyor and was quoted between £8,700 - £10,700 plus costs. This is a big difference from what the freeholders are asking.

I currently pay £35 ground rent, which would then increase to £75 in the next 33yrs and to £105 in the final 33yrs. It was valued at £135k in Oct 08.

The surveyor contacted the freeholders to start a negoiation but they flatly refused and would not budge from their £40K asking price.

Has anyone had any experience in extending their lease and so would know of good reasonable, solictiors, that have solid expereince in this filed that i could also use?

Also would i have to pay what the freeholders are asking, a sum i cannot afford or would it be i would have to meet them half way and pay £20K?

Thanks for any help.

savvy

[louise66]

Hi,

I own a 1 bedroom flat in a purpose built block in east london. The lease is for 99 years from 24/06/80 has come down to 70 years and i would like to renew it. (as of 25/06/09 will be 69 years and counting). The freeholders of the property (nasty piece of work), who incidentally are also the managing agents contacted me inquiring if i wanted to extend the lease for a premium of £40k plus costs.

I had a valuation done last year in Oct by a surveyor and was quoted between £8,700 - £10,700 plus costs. This is a big difference from what the freeholders are asking.

I currently pay £35 ground rent, which would then increase to £75 in the next 33yrs and to £105 in the final 33yrs. It was valued at £135k in Oct 08.

The surveyor contacted the freeholders to start a negoiation but they flatly refused and would not budge from their £40K asking price.

Has anyone had any experience in extending their lease and so would know of good reasonable, solictiors, that have solid expereince in this filed that i could also use?

Also would i have to pay what the freeholders are asking, a sum i cannot afford or would it be i would have to meet them half way and pay £20K?

Thanks for any help.

savvy

I would have thought that the freeholders can ask what they want for the lease extension, and it is up to you whether you think it is worth paying or not. A bit like the asking price for a property; sometimes we pay more than the market value of a property, because it is more valuable to us.

What you do have issue with is the ground rent or service charge, and what you receive for that cost.

I do agree that 40k is extortionate for the lease extension. I would consider how long you intend to keep the property. If I wasn't too bothered about remaining in it, and could afford to do so, I would sell up and move, to cut any financial loss I may incur with a much shorter lease.

[Mortitia]

Hi there,

I don't agree with the last post and I think these so called 'freeholders' are trying it on. How many flats are there in the block and how many are privately owned?

A law has been passed stating that where 70% (it may be less) of flats are privately owned these people can get together to buy the freehold and manage the block themselves by setting up their own management company. The freehold or lease has to be sold at a 'reasonable' price - hence your surveyors reasonable estimate.

Go and knock on doors and suss the situation - as a group you are more powerful so get together and start negotiating to buy the freehold then you can just renew the leases to yourselves at no cost.

I think 20K is too much especially if the block is in disrepair. Start challenging these people and take legal advice for the fine detail if necessary. Check back on this site as there has been more on this in the past.

Good Luck

Mortitia