I cannot grant myself a lease extension?

by Readers Question

8:16 AM, 10th June 2016
About 2 years ago

I cannot grant myself a lease extension?

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I cannot grant myself a lease extension?

I have just learned that my flat is 67 years lease remaining the same as the other flat which is asking me for a lease extension as I am the freeholder. Now come remortgage and I have been informed to extend the lease. I am the freeholder, but in the land registry it is 67 years lease.grant

I have received an email to the solicitor and it says down below.

Upon reviewing the file, we note that the freehold interest and the leasehold interest are in exactly the same names. The issue is that you cannot grant yourself a lease extension. Therefore, the freehold or the leasehold would need to be transferred into a different name before the lease extension can proceed.

However, if you were looking to transfer the freehold, the provisions of the Landlord and Tenant Act 1987 may apply to you and if so, you would need to comply with the said before transferring the freehold. We do not deal with such matters therefore you would need to appoint a solicitor who deals with transfers of freeholds for landlords before you proceed any further with the lease extension/ remortgage.

My question is how did the solicitor conveyancer did not register the property in the land registry as freehold when I bought this property?

What shall I do if I can not grant an extension to my lease?

Jimmy



Comments

Simon Bentley

12:28 PM, 10th June 2016
About 2 years ago

Do you have mortgages on both the Freehold and the Leasehold or just one?

If just the leasehold is mortgaged you could transfer (gift) ownership of the freehold to yourself plus one (or more) other(s) (wife, partner, family member etc) - and then I believe the legal entity of 2 (or more) people would be able to extend a lease with yourself as the other legal entity.

If both are mortgaged this may still be possible but is likely to be much more complex as the mortgage company would have to agree to changes in ownership and most likely add that person to the mortgage etc.

I am unsure but I do wonder if your lease is technically valid. You must have bought both the leasehold and the freehold, rather than bought the freehold and then created the lease, as it is not possible to grant a lease to yourself (how can there be any consideration for one). By buying both you would appear to have circumvented that obstacle however I do wonder if that might also have nullified the lease. Alternately did you buy both lease and freehold from the same person and do you know the history of the lease? Who was it created for (presumably 33 years ago)and was that for the freeholder? In which case it is possible that the lease was never valid.

(I am a lay person and the above is simply my conjecture based on my own understanding of things and should not form the basis of anyone's decision making process nor will I accept any liability- ALWAYS take proper legal advice)

Ian Ringrose

13:28 PM, 10th June 2016
About 2 years ago

The problem is that the OTHER leaseholders have legal rights to buy the freehold if the freehold is “sold”.

Would the lender be happy to take a charge over the freehold instead of an extension of the lease?

Have you got a wife you can give the leasehold to?

(Most lenders will not lend on freehold flats, so combining the freehold of the land with the leasehold of the flat is not an option unless you own all the flats in the block.)

Jimmy Ragadi

15:00 PM, 10th June 2016
About 2 years ago

Reply to the comment left by "Simon Bentley" at "10/06/2016 - 12:28":

The house is divided into two flats. One of the flat is my mine and the other one belongs to another landlord. When I bought the house in 2002, it says on the advert freehold.
The other flat is leasehold and the leaseholder is paying me £50.00 a year.
Now come remortgage, and I have just learnt that it is only 67 years lease in the land
registry.

Jimmy Ragadi

15:04 PM, 10th June 2016
About 2 years ago

Reply to the comment left by "Simon Bentley" at "10/06/2016 - 12:28":

I have only one mortgage as I do not own the two flats. I only own one of them and the other flat is owned by other landlord. Mine is freehold and the other one is leasehold and
paying me £50.00 a year for a ground rent. In the land registry, both flats have only
67 years lease.

Jimmy Ragadi

15:12 PM, 10th June 2016
About 2 years ago

Reply to the comment left by "Ian Ringrose" at "10/06/2016 - 13:28":

The flat is in the joint name of my wife and me.
The other flat owns by another landlord and is only leasehold. It is
in the process of extending his lease with my approval, and is
paying me for the premium.

It came altogether, my remortgage of my flat and the leasehold extension
of the other flat owns by another landlord. It came to light that my flat and the other flat
is the same 67 year leased at the land registry. I own the freehold of the house which
consist of two flats.

Graeme

15:58 PM, 10th June 2016
About 2 years ago

Is the freehold held on a separate tile number at the Land Registry from the leases?

Jimmy Ragadi

16:06 PM, 10th June 2016
About 2 years ago

Reply to the comment left by "Graeme " at "10/06/2016 - 15:58":

I do not have any freehold title. Only the leasehold title. But when I bought 2002, it says
freehold on the advert. I think my conveyancer in 2002 did not process properly, as my solicitor cease his business and I was referred to another solicitor. There was a mention
about freehold in the correspondence but I do not have the document. I think this was
I missed to follow up during that time.

Jay James

17:39 PM, 10th June 2016
About 2 years ago

Reply to the comment left by "Jimmy Ragadi" at "10/06/2016 - 16:06":

First things first. Check with Land Registry who has the freehold (and each of the leasehold(s)). Don't rely on any existing knowledge or paperwork. Thats just a few minutes and pounds online.

Jimmy Ragadi

18:00 PM, 10th June 2016
About 2 years ago

Thank you for the replies, my broker is looking for another solicitor to do this
job, as the current remortgage solicitor says they do not deal this kind of leasehold/freehold.

Puzzler

8:09 AM, 12th June 2016
About 2 years ago

I have exactly the same problem, I purchased a flat in a block which had belonged to my father and which he had sold leaving the rest on one title. You need a specialist solicitor for this, but you can put one or other into different names e.g. yours only and yours and your wife's.

If there are only two flats, the other owner does not have the right to buy it. However it would be simpler if it were shared and this would solve your lease extension problem plus maintenance would be shared going forward, otherwise you alone are responsible e.g. for the roof

First though you need to check exactly what is on the title.

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