Extending 68 year lease with share of freehold

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K
KTLandlord
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Hi all,

I own the top floor conversion flat in a Victorian block of three. This includes a share of the freehold which is owned by way of a share in a Ltd company of which all three owners are directors.

The owner of the middle flat wishes to sell and it has come to her attention that our current leases only have 68 years to run. As such she needs to extend her lease in order to meet the requirements of her buyer's lender.

The owner of the ground floor flat would also like to extend his lease to smooth remortgaging to release some funds. I'm pretty sure his lease also needs to reflect that he has built a substantial kitchen extension.

If I understand it correctly the best and most cost effective route would be for us all to extend our leases at the same time, through the same solicitor and to make them 999 years at a peppercorn rent?

I have let the other owners know this and intimated that I would be happy to go ahead - but that the new lease should stipulate the ground floor flat has sole financial responsibility for maintaining their extended flat roof and the fences of their private garden.

I have also requested that my title plan should be redrawn to include a small area above the roof of the middle flat in order that I might build a balcony over it at some point in the future (as neighbouring properties have done) and not have pay out for a new variation at that point.

This aside, the owner selling is panicking that rewriting all our leases will be too expensive and might take too long causing her lose her buyer.

As such, she is proposing to just extend her lease.

Is she right about time and cost, I'd have thought it would certainly be cheaper and shouldn't take much additional time as it is mainly duplication.

I'm also wondering what would happen about the marriage value. If we all do it collectively then we would notionally all be paying the same amount as we are receiving back so it would be negated for tax purposes. However, if she goes it alone then surely she'd have to pay market rate to the Ltd company?

Thanks, in advance.
22/05/2016 10:30

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