When it comes to houses that have been converted into flats on long leases, it's not uncommon for the flat owners to have a share of the freehold. This is often the case because the owner of the original house has extracted much of the property's value by converting it into flats and then selling them while retaining the freehold. This can have residual value, but it also comes with ongoing hassle.

To mitigate these challenges, many converted houses have a share of the freehold, where the freehold title is owned by a limited company, and buyers of the flats in the future receive a share in the limited company in addition to being the owners of the long leasehold for their flat. This setup provides a major advantage for lease extensions, as the leaseholders can avoid paying the freeholder a premium to extend, which can be thousands of pounds, depending on the value of the flat and the length of the lease remaining.

Solving potential issues when it comes to extending the shared freehold

However, difficulties can arise with a shared freehold. The most common issue is when the flat owners don't get along, and one or more owners refuse to extend the lease without charge or quickly out of animosity and spite. To prevent this situation, the freehold company's articles of association or shareholders agreement should include clear provisions and processes for resolving conflicts. However, if these provisions are not in place, a court application and the threat of a costs order may be necessary.

It's important to note that extending a lease with a shared freehold is not 100% free. There will still be legal documentation required, typically a deed of surrender and re-grant of the lease, and lender consent may also be necessary.

Read: Why do solicitors ask to see source of funds when you’re buying a property?

Understand when you should consider extending the lease

Regardless of the type of lease extension, it's always best to extend the lease as soon as possible if the lease has less than 90 years left. This will avoid the stress and delay of leaving things until you decide to sell the property, as the buyer and their lender may require the lease to be extended, or even back out of the sale if the lease is not extended.

At Fonseca Law, we are highly experienced in all aspects of lease extensions and offer a swift and efficient lease extension service within our conveyancing and property legal services. We understand the challenges that can come with extending a lease for a shared leasehold property, and we're here to help our clients overcome them. Our team of experts will work with you to ensure a smooth and stress-free process, from start to finish.

In conclusion, if you're facing difficulties with extending the lease for your shared leasehold property, we’re here to provide the guidance and support you need. With our experience and expertise, we'll help you navigate the process and overcome any challenges along the way. So don't hesitate to reach out to us for assistance - we're here to help. Simply call 01495 303124, e-mail enquiries@fonsecalaw.co.uk or complete our online contact form.