Buying A Property With A Short Lease?

What to Consider When Buying a Property with a Short Lease

If you are planning to purchase a flat that has a short lease, you or your lender may require the lease term to be extended as part of the purchase.

In theory the concept is straightforward; it is perfectly possible for a seller with two years’ ownership of their property to assign their legal right to extend the term of their lease to a buyer on completion. The buyer is then free to carry on and complete the lease extension process with the landlord.

In practice however there are a number of potential traps that may cause problems for the unwary. A simple mistake by the seller’s conveyancer can mean the right to an extended lease is lost, giving leverage in negotiations to a freeholder who can then name their price for granting an extended lease or force the buyer to wait two years. This is particularly so in the case of an of an investor freeholder with the benefit of professional advice.

Care must therefore be taken in the preparation and service of the formal lease extension notice, because if this is not picked up until after completion of the purchase, it is likely that the premium payable will increase over the two years the buyer is forced to wait to bring a new claim for an extended lease term. The mortgage terms might also be breached if this was a condition of the lending.

It is therefore advisable to involve a leasehold enfranchisement specialist early on in the process and certainly prior to exchange of contracts and completion. A specialist can assist in drafting the formal notice to be served by your seller and ensuring it is properly served prior to completion of the purchase, they would then continue with handling the claim to a new lease for you following the purchase.

If you have any questions, would like further advice on any aspect of the above, 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

Christopher Last 01273 249236 cl@deanwilson.co.uk