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I have had an offer accepted on a flat in prime central London in a block consisting of 15 flats which is managed by a freehold management company.
After receiving the contract pack, the solicitor informed me that the lease has 60+ year unexpired. All flats within the block come with a Share of Freehold.
According to the lease, 10 of the 15 flats had extended the lease to 999 years with Nil peppercorn in 2007. The current owner purchased his flat in 2005 and must have ignored or missed the extension and the agency stated that he was not aware and thought it was long-lease flat.
We have contacted the freehold company, and the person who is responsible for the lease-extension purchased the flat on the same floor with same specification 18 months ago for about 35% more. After asking him the process/timeframe for extension he replied with the following:
can you please provide contact details for:the firm of solicitors/conveyancers being used by the vendors, andthe firm of solicitors/conveyancers being used by you.Also, please provide the gross sale price the Flat (which is presumably still subject to contract).
can you please provide contact details for:
Also, please provide the gross sale price the Flat (which is presumably still subject to contract).
it is rather strange that the owner of the next door neighbour is asking for the price. My question is: Does the sale price have any bearing on the extension of the lease? Is it legally correct him to be asking this question or does that mean he has a personal interest in the property? Note that the flat in Question is a Share of Freehold and according to the company house, the current owner holds 6.22% as a shareholder.
The latest information I have obtained from my solicitor is that there is likely to be a PREMIUM involved for the extension of the lease. My understanding is that all flats with Share of Freehold can be extended to 999 years with Nil premium. Is there any clarity on this or is it case dependent and what ever the freehold management decides then the seller will have to accept?
Chartered Accountant, Tax Advisor and Mortgage broker
(and BTL portfolio owner)
As stated, the current owner holds a share of freehold (6.22% as illustrated on company house) and the idea here is to extend the lease from 63 years to 999 years. Not to purchase the freehold.
Thanks for the insight. Just to clarify, my understanding is that given that the flat has a share of freehold, then it should be come with Nil premium and just a legal fees to extend from the Share of Freehold, with 63 years lease to Share of Freehold with long-lease (999 years from 2007 as the date when all other 10 flats extended). I thought if its just a leasehold (i.e. without the share of freehold) then the premium exists.
If the other 10 flats extended for Nil premium in 2007, does that not give the current owner a right to extend for ''free'' ? Afterall, he owns 6.2% of the freehold company
Thank you very much. Just to reiterate, the vendors name is shown on company house for owning 6.22% of the the share of the freehold. There are 15 flats and all but one flat hold around 6-8% share of the freehold. The vendors name is included as one of the shareholders.