Legal Q&A: should I buy a flat in London with a short lease?
Question: We want to buy a flat but the estate agent has said that the lease is very short – he thinks about 65 years and says that is why the flat is cheap. He also said that we might be able to extend the lease but has given no other information. The flat is lovely and we want it. We have never had a leasehold property and don’t really understand why its cheap – does it really matter or should we walk away? Could we extend the lease easily?
Answer: As the length of a residential lease gets shorter the value of the property usually decreases.
Establish if the landlord is prepared to grant a new lease to the seller which should be completed before or at the same time that you complete the purchase of the flat.
If you are likely to get a longer lease at completion a lender may be prepared to lend to you.
If the landlord will not do this, then provided the seller has owned the flat for at least two years the seller has a statutory right to extend the lease, although there are some exceptions.
The seller could start this process by serving an Initial Notice on the landlord the benefit of which can be transferred to you on completion.
This is a complex and often costly procedure but generally worth it as the value of the flat is likely to increase once the lease is extended.
Instruct a solicitor who is a specialist in this field. You will need a specialist surveyor too.
If you have a question for Fiona McNulty,please email legalsolutions@standard.co.uk We regret that questions cannot be answered individually, but we will try to feature them here. Fiona McNulty is a solicitor specialising in residential property.
These answers can only be a very brief commentary on the issues raised and should not be relied on as legal advice. No liability is accepted for such reliance. If you have similar issues, you should obtain advice from a solicitor.
