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  • Property-a-holics

    Lease extension but only back up to 99 years

    I have seen an interesting flat, but upon further digging there's 74 years left on the lease.

    Apparently the lease extension is currently £12k which will only take the lease back up to 99 years!

    Is this correct? I thought an extension was whatever the lease was plus 99 years, and then the ground rent gets removed from the annual bill.

    Sorry about yet another lease question!

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    Statutory lease extension is governed by law and that adds 90 years to the lease with nil ground rent.
    However you can have other arrangements, it comes down to what deal you negotiate with the freeholder. 
    In this case statutory lease extension will probably be more than £12k.
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    Thanks for the info!

    So even though there's a statutory governed by law, the leaseholder can go for a different option if they want?

    The unfortunate thing about this situation is unless the current owner were to kick off the extension process, I'd have to wait for 2 years, but who's to say it would be started off correctly before I've even got any real legal input possible into the process.

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    If you go down the statutory route, your seller (who should have been in possession for at least 2 years) serves the section 42 on exchange and assigns the benefit over to you. This process is governed by law.

    However, if the freeholder will agree (not usually councils but investors will do it) you can agree a different deal and shape it to you requirements. If you want to pay less premium but still add 90 years you could offer to pay some ground rent, etc. With this sort of agreement you don’t have to wait for 2 years of ownership.
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    Thanks very much for this, certainly giving me something to think about with this flat.

    Unfortunately due to it slipping below 80 years now there will be some marriage value. I'm assuming the marriage value would be higher if it was +90 years from where it is now rather than back up to 99 years.

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    It might be worth looking at a leasehold extension calculator to compare the costs of extending the lease asap without paying the £12K with the cost of doing the extension in 2 years after paying the 12K to extend the lease over 80 years.

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