Brady Solicitors were recently instructed by a managing agent client to act on behalf of both the freeholder and leaseholders for a bulk lease extension project in central London. Having worked with the managing agent for years, we had carried out numerous lease extensions previously, so we were their first port of call when they became aware of 44 of their leaseholders looking to extend their leases.
The freeholder initially noticed that it could be within the leaseholders’ best interest to extend their leases when reviewing their property portfolio, as they were getting closer to the 80 year mark. If the lease length was left to drop beneath 80 years, the leaseholders would have then needed to pay a higher premium which would include ‘marriage value’ and should they wish to sell or refinance their property, it would have been unlikely that they’d have been able to do so. Mortgage providers don’t tend to offer mortgages on leaseholder properties with 80 years or less remaining on the lease.
Upon instruction we were provided with the contact details for each leaseholder, informed which property they lived in, and which parking bay was associated with their property. However, when we gathered the titles for the relevant properties from land registry, the vast majority of them didn’t include the parking bays associated with the property. Whilst this is rare, we have carried out lease extension projects previously where parking spaces, garages or even gardens have had separate leases to the property, so we were familiar with how to manage the situation.
Following the establishment of two separate leases for some of the properties, we informed the freeholder as they weren’t aware. We went on to inform the freeholder of their options, which were to combine the leases and extend them as one or keep them separate and extend one or both of them. The advantage of only having one lease would have meant lease extensions in the future would have been cheaper, but keeping the leases separate would have made it easier for leaseholders to sell their parking bay separate to their property should they wish to do so.
The freeholder advised us that they would like to take time to decide on the next steps as they wanted to discuss the situation with the relevant leaseholders. They did however ask whether we could proceed with a lease extension for one of the properties swiftly, as the sale of the property had already been agreed subject to getting the lease extended for it.
We were of course happy to do this and were able to complete the lease extension within a couple of months. The sale of the property has now completed without any delay, whilst we discuss with our freeholder client on how to proceed with the remaining 43 leases.