If you own a share of the freehold, you might assume there’s no need to worry about the length of your lease, but that’s not always the case.
In this article, Leasehold Specialist Kerry Martin explains when and why you might still want to extend your lease and answers the most common questions people ask about lease extensions for shared freeholders.
Do I need to extend my lease if I own a share of the freehold?
Yes, even if you own a share of the freehold, you will usually still have a lease in place.
In this situation, you own a leasehold flat but with the added benefit of also owning a share of the freehold.
It’s important to remember that the lease will still need to be reasonable in length if you decide to sell or re-mortgage your flat in the future.
Why do I need to extend my lease if I own a share of the freehold?
Even if you own a share of the freehold, it’s important to keep your lease at an acceptable length.
Buyers and mortgage lenders usually expect a lease to be of an acceptable length if you decide to sell or remortgage the flat.
Extending the lease helps you ensure that you won’t have issues if you choose to sell or need to remortgage in the future.
How do I extend my lease when I own share of freehold?
If you own a share of the freehold, extending your lease is usually much simpler than when a third-party freeholder is involved.
The group of freehold owners (often a limited company owned by the flat owners) can agree to extend the lease themselves.
In most cases they grant 999-year leases and officially reduce ground rents to a peppercorn. This is typically done for no premium (nil consideration). There is usually no purchase price, and the only costs are legal fees and Land Registry expenses.
If your flat has a mortgage, you’ll need the lender’s consent before the lease can be extended. Some lenders charge an admin fee for this. A few lenders also instruct their own lawyers, which could add extra costs, but this is uncommon.
You can contact one of our lease extension experts on 01202 499255 or by filling out the form. They can offer you tailored advice to best meet your individual needs.
How much does it cost to extend a share of freehold lease?
When you own a share of the freehold, extending your lease is usually straightforward and cost-effective.
Usually, there isn’t a premium to pay, as the freehold owning leaseholders are granting lease extensions to themselves.
Our specialist leasehold experts will be happy to provide you with an estimate of costs if you’re thinking about extending your lease.
Do all freehold owners have to agree to your lease extension?
If the freehold is held in the name of a limited company, the number of shareholders that need to agree will be dictated by the company’s memorandum and articles of association.
However, if the freehold is held in the individual names of a group of flat owners, all freehold owners will need to agree. They will also all need to sign the lease extension documents.
Is it cheaper for Freehold owners to collectively extend their leases?
It is often cheaper for freehold owning leaseholders to extend their leases at the same time.
We offer discounted fees for groups of lease extension that go ahead at the same time. Our experts will be happy to provide you with a tailored cost estimate based on the number of flats in your building.
Leasehold Extension Specialists
Our expert team of Leasehold Property Specialists, will be able to provide you with tailored advice in plain English to help you reach your desired goals.
To speak to a member of our Leasehold Team, about dead of variations or license to alters, call 01202 499255.
All new clients are offered a free initial chat, giving you a chance to discuss your need. You can book your initial chat via the get in touch form at the top of this page.
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