Lease Extension of flat lease I am looking to buy

Hi,

The issue here, is the fact that in two years time, the lease will have less than 80 years remaining, and this means you would pay significantly more for a new lease than you would if the lease had more than 80 years remaining. This additional factor is known as "Marriage value". You may ask why you cannot just buy the flat now and then extend if afterwards. The difficulty here, is that you need to have owned the flat for 2 years before you can serve a formal notice on the freeholder, requesting an extended lease. By the time two years has passed (from when your name has been registered at the land registry, not completion itself), your lease will have less than 80 years remaining.

You can of course negotiate with your freeholder outside of the legislation, but your freeholder is likely to demand a higher premium, knowing this route is your only option for two years. Or your freeholder may simply refuse to offer a new lease and wait until the term reduces to below 80 years.

I would suggest you ask your seller, if you haven't asked already, if they have enquired of the landlord whether the lease can be extended. The ideal scenario would be that your seller arranges and pays for the new lease before completion. However, it can be expected that your seller will refuse and simply state that the flat has been discounted to reflect the cost of a lease extension.

We can get around the two-year rule, to enable you to seek a new lease by way of a formal notice. In other words, I can prepare the appropriate documentation to enable you to make a formal claim for a new lease as soon as you have purchased your flat.

For more information on the procedure and any other aspect of your purchase, please feel free to email or call me using the details below.

Best of luck!

Tom Merralls
TJM Law

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