How do I increase the Lease on my 4 Nottingham Council flats?

How do I increase the Lease on my 4 Nottingham Council flats?

8:20 AM, 9th August 2021, About 3 months ago 30

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I have 4 flats (separate buildings) where the Council own the building (Freehold-Is that right?). I pay service charge approx £100+ each flat each year + Estate rent £10 each flat. No mortgages on each flat if that makes a difference.

My limited knowledge and notes on this tells me: Council have to extend Lease back to 99 years. I can’t get a mortgage if only 70 years are left. Do flat Leases when near 90 years renew.

One of them has about 92 years left. One has 88 years left. How do I find out how many years are left on each one without digging my deeds out?

I started the ball rolling yesterday, initial fee for a company is around £1800 inc. vat + the Council fees + I guess the Council costs.
The flats are only worth around £85,000 with rents of around £6000 pa, so it seems to start with, the fees are expensive considering the little value and rent.

If it makes a difference on what I’m doing with ’em in years to come, well initially I wanted to save them, so when my tenant’s kids in the houses left home and their Housing Benefit reduced, and they couldn’t afford the house anymore, I could say Here you go, I have cheaper flat for you here. And I’ve done that in the past with the flats.

However, at the moment, the people aren’t leaving the flats either. Apart from one where the girl just moved in and hopefully may buy it off me within 3 years. So if the flats do come up, as time ticks on, I think I am gonna’ sell them. As the house people now are saying they don’t want to leave their home no matter what and muggins here don’t charge ’em proper rent cause they can’t afford it.

Please don’t confuse me with complicated regs, I’m good at renting houses out and maths, but as soon as you say Section 27.2 Rule 7 (B) paragraph 2, you’ve lost me-I’m getting a plane to Magaluf.

Just simple what to do, phone number, expert etc. Or is it because it’s Council, they more gentle and can deal with ’em direct? However, my experience with a lot of departments in Council is any affiliated to the Councillors is not great.



Comments

by RODNEY CRABB

8:57 AM, 9th August 2021, About 3 months ago

Just ring the council
Should around 2 to 3k each flat if you do it now. Is the 1800 legal costs

by Judith Wordsworth

9:06 AM, 9th August 2021, About 3 months ago

Get a downloaded office copy of the register from HM Land Registry to work out how many years left on each lease. Around £3-7 per flat.

Contact the Council yourself, the person who sends your service charges invoice/ground rent invoice and they'll put you in touch with the right person to ask how much they want to increase the lease and how many years they would be agreeable to (99/125/999). This can be done with either a Deed of Valuation or a Surrender and Re-Grant. Then contact a solicitor or Licensed Conveyancer (but never use Premier Property Lawyers even if you think are cheaper) to draft, get it approved, signed etc and registered at HM Land a Registry.

When you come to sell ask the Local Authority if they would be interested in buying back the properties. They won't care the state of them as will do a full re-furb even if it's in a super state.

by Laura Delow

9:12 AM, 9th August 2021, About 3 months ago

If the remaining lease terms are approx. 88yrs & 92yrs, if you choose to sell them, any purchaser will not be disqualified from getting a mortgage because of the lease term as most lenders require a minimum remaining lease term of 80yrs (a few like Kent Reliance allow >60yrs). The critical remaining term is 80yrs because of the ‘marriage value’ whereby you can expect to pay anything up to 50% more to extend a lease with a term of 79 years remaining than you would if you extended when there were 80 years remaining & therefore planning ahead is important.
A statutory lease extension allows a leaseholder to add 90 years onto the term remaining on their lease. If your current lease has 80 years left on it, then the extended lease would be for 170 years.
If you want a detailed but simpler explanation, look at the following link.
https://www.moneysavingexpert.com/mortgages/extend-your-lease/
However, I would also suggest you look at the Leasehold Advisory Service for although it is more legally driven, I find it very simple to follow & understand - see link
https://www.lease-advice.org/advice-guide/lease-extension-getting-started/

by BernieWales

12:07 PM, 9th August 2021, About 3 months ago

by Jo Westlake

12:54 PM, 9th August 2021, About 3 months ago

Should be pretty straightforward with ex Council flats. I've extended 2 that weren't ex Council with very mixed experiences. Both of mine had dropped below 80 years so were a bit more complicated.

One was a negotiated extension and I was very lucky the freeholder was very fair. My solicitor wasn't a leasehold specialist and I could easily have fallen into the restoring it to 99 year trap with sky high ground rent.
The other one was Statutory as the freeholder was horrendous to deal with. They refused to negotiate so Statutory was the only option.
The Leasehold Advice Centre were very helpful.
A Statutory lease extension will give you an extra 90 years on top of what you currently have and no ground rent. They can "modernise" some clauses so look out for anything sneaky.

Negotiated is easier and cheaper on fees if your freeholder is sensible. So ask the Council what the negotiated option is. Councils should hopefully be pretty good at offering broadly the same as a Statutory extension would give you with lower legal costs and less stress. Be aware though negotiated means just that. They can try for anything they want and it's up to you to challenge it and negotiate something better if you think they are being unreasonable.
In the building where I did the Statutory extension other leaseholders went the negotiated route and got lumbered with £350 a year ground rent and only restored the lease to 99 years.

So whichever way you go you want at least 90 years adding to your current lease.
No (or very minimal) ground rent.
Minimal "modernization" of clauses.

Probably best to use a leasehold specialist solicitor.

There are leasehold reforms in the pipeline (allegedly) so who knows how it will look in 3 or 4 years time.

by silversurfer2017

20:22 PM, 9th August 2021, About 3 months ago

Don't mess about. The ground rent is so low that any lease premium will be very low. Engage an ALEP solicitor and apply for a 90 year statutory lease extension with a peppercorn (zero) ground rent. ALEP is the Association of Leasehold Enfranchisement Practitioners. These are solicitors and valuers whose expertise is in lease extensions or purchase of freeholds. It might be possible for you rather than just extending the leases to purchase the freeholds.Your ALEP solicitor will be able to advise you.

by Laura Delow

6:11 AM, 10th August 2021, About 2 months ago

If you want to keep costs down, try Homehold.org who charge a Fixed Price of £1950+VAT that covers the Valuation, Notices & Negotiations & Conveyancing but excludes the cost of extending the lease (the premium), the freeholder's valuation and legal costs – which you have to pay, and going to tribunal (this rarely happens as the freeholder has to pay their own costs). Have a good look at their website & as a premium guide price, use their online calculator.

by silversurfer2017

8:37 AM, 10th August 2021, About 2 months ago

With £10 a year ground rent the lease premium is going to be very low. Don't bother to negotiate until the notice has been served for a 90 year statutory lease extension at a peppercorn rent and wait until you get the freeholders counter notice. I have extended the lease on two of my properties and each time I started off by serving notice for a statutory lease extension. Unlikely in the case of a Council but sometimes freeholders can use underhand arm twisting tactics by using expensive valuers and solicitors and saying they will only negotiate if you agree to reimburse their expensive legal and valuation costs. (they get kickbacks!) Excessive costs can be challenged and reduced by the First Tier Tribunal.

by Mick Roberts

16:17 PM, 10th August 2021, About 2 months ago

Reply to the comment left by RODNEY CRABB at 09/08/2021 - 08:57
Yes,

Sent an email off to my contact who does the flats bills etc. And he's sending it on to the Council team.

Yes my next question is, at what point does it become expensive in that, u do them with 90 years left & if you'd have left it till 80 years, would it have only been £500 more?
Or if left it to say 80 years, would someone say u fool Mick, it's now £10,000 more than if you'd have done it at 90 years? Is there some sort of formula for when best to do?

by Mick Roberts

16:17 PM, 10th August 2021, About 2 months ago

Reply to the comment left by Judith Wordsworth at 09/08/2021 - 09:06
I've now got the lease details from my Council man:
X Boniface Gardens – 125 year lease from 24/06/1988 so expires in 2113 (92 years left)
X Highbury Road – 125 year lease from 29/09/1987 so expires in 2112 (91 years left)
X Jacklin Gardens – 125 year lease from 25/03/1988 so expires in 2113 (92 years left)
X Riseborough Walk – 125 year lease from 25/12/1984 so expires in 2109 (88 years left)

Yes Judith,
Sent an email off to my contact who does the flats bills etc. And he's sending it on to the Council team.

My Labour MP right now is trying his contacts at the Council to buy most of my houses with the tenants in, as Council did want to buy, but empty.

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