Beware – does the lease of your flat have less than 80 years left?
Leases of flats are generally between 99 and 125 years, but once the lease starts, the duration gets less and less, and over time the flat will prove unattractive to a buyer, and to a Lender.
Quite often owners of flats do not realise they have a short lease because their conveyancer, who they employed when they bought, failed to spot it for them or to advise them of the consequences of a short lease.
But what is a short lease?
Usually Buyers are put off buying a flat with 80 years or less to run, as whilst a mortgage company usually accept a minimum of 60 years, buyers are not so willing as they know what is in store in the future. They know the longer they hold on to a flat with a lease of 80 years or less, the more likely they will encounter problems on a re-sale with a difficult buyer who thinks the lease is too short.
Extending your lease will therefore add significant appeal and value to your sale. But it does cost money – and this is why a flat with a short lease will put people off buying it, and why you will have to spend money if you now own one.
But be careful about contacting your Landlord if you feel you need to extend yours. They could offer a lease extension for a very high fee but sound very charming by offering to make the process very easy. You should know the Leasehold Reform Act 1993 may legally entitle you to a lease extension at a much lower market price.
Indeed, if the landlord realises that you are selling your property they could increase their fee on the assumption you need to act in a hurry.
The solution is to approach a conveyancing solicitor who knows about lease extensions and who can advise on the solution. There are a lot of outfits – even firms of solicitors – who claim to know what they are doing as part of a wider conveyancing business, but you usually end up without the skill of a solicitor and instead you get pushed over to some unqualified clerk who trebles the timescale it should take and litters the necessary paperwork with errors.