Why Should I Extend?
A lot of flat owners only become aware of the implications of a shortening lease when they come to sell their property, however, there are a number of reasons why you should consider extending your lease:
- Safeguard the value of your property from the effect of a shortening lease
- Make it easier to sell your property now or in the future
- Make it easier to mortgage or remortgage your property
- Safeguard the value to pass on to the next generation
Don’t bury your head in the sand and let the value of your property diminish. Our advice is to get the right valuation and legal advice and, if possible, in most situations look to extend your lease on the statutory basis sooner rather than later, especially if your lease is nearing 80 years remaining. (Click here to see how the 80 year threshold can affect the premium).
Why Buy the Freehold?
Some flat owners may wish to go further and buy the freehold in conjunction with other flat owners in their building (a process known as collective enfranchisement). Reasons for doing this can vary from dissatisfaction in the management of the block under the current freeholder to wishing to have control over the works and costs for the building whilst also being able to address the issues of any shortening leases.
Alternatively, if a freeholder wishes to sell the freehold, he/she must (by law) offer it to the flat owners under the “Right of First Refusal”, which might be of interest to the flat owners for the reasons given above.
A potential stumbling block for flat owners wishing to buy their freehold, either by collective enfranchisement or Right of First Refusal, is the extra finance needed to cover the non-participating leaseholders. However, it is possible for a “whiteknight” to provide the extra finance to enable the purchase to proceed and effectively become the share freeholder for those non-participating leaseholders.