I am in the process of buying a flat in London. It has
Hello, I am in the process of buying a flat in London. It has 80 years remaining on its lease, however the seller (and current leaseholder) served a Section 42 notice to the freeholder last year to renew the lease (to a 150 year term). She did this in a joint action with all the other leaseholders in the same block. The new lease is now being executed, and at this moment is with the freeholder's solicitors.
The problem is this: because the seller is in such a hurry to get this transaction done (and because there is an onward chain), the renewed lease will not be in place at the time of exchange (they are pressing for an exchange date of next Tuesday). I have been promised, however, that the renewed lease will be in place by the time of completion.
My solicitor has told me she has inserted a clause into the contract that says the entire transaction is contingent upon having the renewed lease in place by the time of completion. If this is not done I will be in a position to sue the other side.
My question is this: should I be worried, or is this business as usual? I have asked the Lease Advisory agency, an independent solicitor and a property search consultancy for their advice on their matter and they all say that this looks normal. That said, no-one can give me complete reassurance that something won't go wrong. There is always the possibility that the lease extension won't go through, even though I've had no indication it won't. Thanks.
Edit: Would it be possible to modify the aforementioned clause to say that the purchase becomes null and void if the lease is not renewed by the completion date and that I will receive a refund of all my costs (including the deposit)?
Hi, thanks for your enquiry. What is being proposed, is normal and usual in these circumstances, albeit, it is not an ideal situation. However, the Sellers Solicitor would not have agreed for the Contract to include a clause stipulating that the Lease extension will be finalised by the completion date unless he was confident it will indeed be finalised-otherwise his client will be in breach of Contract. As there is a chain, it won't be possible for the Contract to be amended to make it a Contract conditional on the Lease extension being finalised, as your Seller would have to impose a similar clause in their Purchase Contract and so would everyone else in the chain have to agree a similar provision. The only amendment you could ask for is that the Contract be amended to say completion will take place within say 7 days from the date the Lease extension is finalised. This isn't ideal as all the other parties in the chain would have to agree to a similar clause in all their Contracts and the parties won't have a fixed completion date on the date Contracts are exchanged. I hope this assists and sets out the legal position. Kind Regards Al
Hi, can I assist you any further? Kind Regards Al
Hi, if I have assisted, I would be grateful if you could rate my answer. Kind Regards Al