Extending the lease on my leasehold house or buying the freehold? Which is best
http://sol-bd.com/?author=1 You can extend the lease on a house – however you are likely to be better off buying the freehold. This is generally referred to as leasehold, collective or freehold enfranchisement’.
l-tryptophan price When it comes to extending the lease on a house, a different process applies to lease extension for flats and apartments. House leaseholders can generally extend their lease for up to 50 years after having owned the flat for 2 years, whereas flat owners can extend by 90 years. Extending a lease also means that you have to follow a strict procedure with your freeholder and will need to pay expensive legal fees (unless you are able to informally agree to lease extension with the freeholder).
The flat lease extension rules and procedures will apply if your lease only covers part of a converted house.
When can I buy the freehold?
Once you have owned the house for 2 years you will be able to purchase the freehold. You cannot do so before this 2 year period has elapsed.
Where can I find out who owns the freehold?
If you are struggling to find your freeholder, you should get in touch with the Land Registry which will be able to find the registered freeholder in their records.
Why buy the freehold of my house?
Buying your freehold is often a better option than extending your lease because of the control it gives you. If you own the freehold you will not need to pay ground rent or service charges and will be able to carry our repairs as and when you wish. Furthermore, it is likely to add value to your home and will make it more attractive to prospective buyers. You may find however that you are not entitled to buy the freehold or perhaps cannot afford to do so.
How do I buy the freehold?
Provided that you qualify, you are legally entitled to buy the freehold. You must follow the process and adhere to the deadlines set out in the Leasehold Reform Act 1967. Taking this route allows the First-Tier Property Tribunal (previously known as the Leasehold Valuation Tribunal or LVT) set the terms for the purchase and the price. It may also be possible to informally negotiate with the freeholder to complete the sale. Taking this informal route means that the Tribunal will not give their input and you technically will not have a right to buy the freehold, leaving it to the freeholders discretion. A county court may be able to step in to enforce it though.
Is buying the freehold expensive?
Whereas flat owners need to pay the freeholder a fee in order to extend the lease, house owners do not need to do so. However, you will have to cover the legal fees of both you and your freeholder. This can be expensive but is generally less expensive than buying the freehold.
Can I extend the lease on my house?
It is likely that you will be able to extend the lease on your house provided that you have owned the house for 2 years. You need not have lived in the house for this time however you may not be able to extend the lease if:
• You have previously extended the lease
• You already hold a lease for a business
• The freeholder it a trust for charitable accommodation
• The original lease was awarded for under 21 years or you have sublet the property on a lease under this time
• The original lease has ended
Although you may not be able to extend your lease, you will generally be able to buy the freehold.
What happens if my lease ends?
You cease to own your home once your lease so whilst you may be able to negotiate a lease extension with the freeholder, there will be no certainty. If the lease extension is refused by the freeholder, you will become an assured tenant and your tenant will be the landlord to whom you pay rent. As an assured tenant you will have numerous rights but they will not be as extensive as a leaseholder’s rights. It is therefore crucial that you urgently seek legal advice if your lease is running out.
Will a short lease make it more difficult to sell my house?
Selling a leasehold house is likely to be difficult if you have less than 70 years to run on your lease. Generally speaking, the longer the lease, the more attractive the house is; it is therefore advisable to extend your lease. If you buy a house with a short lease it becomes harder to secure a mortgage and you will have to see out the 2 year people before you can extend the lease. For those considering lease extension, don’t forget to apply for the extension before your current lease runs out. If you leave it too late, you may lose your right to extend the lease completely.
What will happen to ground rent after the lease is extended?
In all likelihood, your ground rent will go up once you’ve extended the lease but it can only go up once the term left on your current lease has run out. Changes to the ground rent will take into account the value of the property at the time of the extension. This can go up again after 25 years. If you are locked in a dispute over the ground rent with the freeholder, a Property Tribunal may be needed to set the rent figure.
Interested in buying the freehold or extending the lease on your house?Call our specialists today
Are you a house owner? If you are looking for advice on lease extension or lease enfranchisement, our leasehold reform specialists can provide you with the specialist legal advice you need.
- Call our team now on 0800 1404544, or
- Send us an email via the contact form below.
Comments or questions are welcome.