When buying a leasehold property it is very important find out, very early on, how many years there are left on the lease; i.e. the unexpired term. If the term is for less than 75-70 years then you should find out from the seller whether he is prepared to serve Notice on the landlord to extend the lease.
Having practiced for some years in London I have come across a vast number of flats in London which have less than 70 years to go before they expire and where buyers have insisted that the lease extension procedure is started by the seller in order for the purchase to proceed. This will, of course, add to the buyer’s costs but it will also greatly enhance the value of the property.
If a lender is involved, you should check to see how many years they expect to see remaining on the lease, before they will offer a mortgage, as requirements vary lender to lender. It is important to find these things out early on so as not to incur unnecessary costs in the event the purchase does not go ahead.
Most sellers will be prepared to serve the requisite notice on the landlord to extend the lease and if they are prepare to do it their conveyancer must follow proper procedures and assign the benefit of the Notice to the buyer on completion. That way the buyer can take over the lease extension procedure, having stepped in to the seller’s shoes. If the assignment has not been done correctly the buyer may find himself in the position of waiting for two years before he can apply to extend the lease himself.
It is particularly important in the current climate to consider applying to extend the lease on a property where there is a short unexpired term since the property value will increase. With property prices predicted to be on the decline it is especially important to consider doing what you can to increase the value of your property.
If you are looking to extend you lease, Fridaysmove have extensive experience in this field – click here for a quote on our fees