What Are The Benefits of a 999 Year Lease?

There are a number of ways by which a group of flat owners might come to own the freehold of their building; most commonly this is by accepting an offer to buy the freehold pursuant to the right of first refusal or through collective enfranchisement.

Once the ink has dried on the freehold transfer it is common for the participating flat owners to grant themselves 999 year leases, even though they each own a share in the newly formed freehold company, but why is this the case?

Put simply, acquiring a 999 year lease enables a flat owner to have a title that is ‘as good as freehold’ and therefore more marketable than for example a 85 year lease, whilst retaining the existing freehold/leasehold structure. Retaining this structure is extremely important, as the existing leases within the building will set out the parties’ responsibilities for maintaining each part of the building, how much each flat contributes to the service charge and other obligations that are key to the continued repair and functionality of the building.

The leases will also give the flat owners rights and obligations in respect of each other, which protects each other’s interests. For example, if a neighbour is committing a nuisance by playing music loud during the early hours of the morning, the lease would in most cases prohibit this, and therefore provide a cause of action and means of putting things right.

For these reasons it is common for flat owners with a share in their freehold company to grant new 999 year leases upon acquiring the freehold. It is also a good opportunity for a lawyer to review the old leases and bring them up to date as well as correcting any defects, whilst extending the lease term.

If you have any questions, would like a formal costs estimate, would like further advice on any aspect of this blog, or wish to set up a meeting with us then please contact:

Ricky Coleman  01273 249251 rfc@deanwilson.co.uk

Claire Whiteman  01273 249229 clw@deanwilson.co.uk or

Christopher Last  01273 249236 cl@deanwilson.co.uk or