Don’t let the fact that the flat you are considering buying has an 81 year lease on it make you completely rule out purchasing it. The critical amount of time left on a lease is 80 years. If the lease has below 80 years remaining the ‘marriage value’ component of the premium payable to the freeholder for the lease extension will add significantly to the cost of that extension – we are talking a few thousand pounds here at the very least.
From the day that the remaining term dips under that critical 80 year period, the ‘marriage value’ will steadily increase as the length of the lease decreases – so extending the lease should ideally be done before it drops below that 80 years point.
Insufficient time for your lease extension? Your options
Unfortunately, although one year would give you enough time to get your lease extended under the relevant legislation, you would not be eligible to make that application as that same legislation stipulates that you must have owned the property for the minimum of two years. However, all is not lost and there are a number of possible options to save you from having to pay the marriage value. They are:
1) Approaching the freeholder to extend the lease without having to make an application under the Leasehold Reform, Housing and Urban Development Act 1993 (as amended). The potential downside to this option is that the freeholder might refuse outright, mindful that when your lease drops below 80 years remaining they will receive a higher premium as a result of the marriage value. Or they might agree and then change their mind, or finally they might agree but impose an inflated premium and disadvantageous lease conditions on you, knowing that you have no legal protection under the Leasehold Reform Act. Additionally, with no legally binding timescale to comply with the freeholder might agree to extend the lease and drag his feet until the lease drops below eighty years remaining.
2) You could approach your seller and ask if he or she would, their eligible permitting, apply to extend the lease, but there is the possibility that they would refuse on the grounds that the cost of the flat includes a discount for the dwindling lease.
3) Finally you could see if the seller would be willing to serve the Initial Notice to extend the lease on the freeholder so that it can be assigned with the lease when the flat sale goes through. Once you have bought the flat you will then immediately be able to continue with the lease extension without having owned the property for the minimum two years specified in the Act. This option could be especially useful if you think that your mortgage provider would have problems with a property with a sub 80 year lease.
Want help with your lease extension? Contact us today
One of our specialist lease extension solicitors will be able to advise you in detail on what is involved in extending the lease on a property with an 81 year lease. Our team can advise you wherever you live in England and Wale,s and we don’t even need to see you – taking your instructions by e-mail, phone and Skype video:
- Just call us on  422300 for a FREE initial phone consultation and a FREE quote for your lease extension
- Complete the contact form below