With a domestic leasehold property in Melbourne, you are actually buying a right to reside in a property for a set period of time. These days flat leases are usually granted for 99 years or 125. Even though this may appear like a long period of time, you may consider extending the lease sooner rather than later. The general rule is that the shorter the lease is the cost of extending the lease becomes disproportionately more expensive notably when there are fewer than 80 years remaining. Leasehold owners in Melbourne with a lease nearing 81 years left should seriously think of extending it without delay. When the lease term has under 80 years left, under the relevant legislation the landlord can calculate and levy a greater amount, assessed on a technical multiplication, known as “marriage value” which is payable.
Leasehold properties in Melbourne with over 100 years remaining on the lease are sometimes regarded as a ‘virtual freehold’. This is where the lease value the same as a freehold interest in your property. In such situations there is often little upside in purchasing the reversionary interest unless savings on ground rent and maintenance charges justify it.
| Lender | Requirement |
|---|---|
| Barclays plc | |
| Barnsley Building Society | |
| Coventry Building Society | |
| Leeds Building Society | |
| National Westminster Bank |
The conveyancers that we work with undertake Melbourne lease extensions and help protect your position. A lease extension can be arranged to be completed to coincide with a change of ownership so the costs of the lease extension are paid for using part of the sale proceeds. You really do need expert legal advice in this difficult and technical area of law. The conveyancing solicitor we work with provide it.
Evan was the the leasehold proprietor of a conversion apartment in Melbourne on the market with a lease of just over sixty years left. Evan informally contacted his landlord being a well known London-based freehold company for a lease extension. The freeholder indicated a willingness to extend the lease to 125 years on the basis of a new rent to start with set at £100 per annum and doubled every twenty five years thereafter. No ground rent would be due on a lease extension were Evan to exercise his statutory right. Evan procured expert advice and was able to make a more informed judgement and handle with the matter and sell the flat.
Mr and Mrs. P Hill purchased a one bedroom flat in Melbourne in March 1998. We are asked if we could shed any light on how much (approximately) compensation to the landlord would likely be for a ninety year extension to my lease. Similar residencies in Melbourne with an extended lease were valued about £280,000. The average ground rent payable was £45 invoiced quarterly. The lease lapsed on 1 June 2096. Having 70 years left we estimated the compensation to the freeholder to extend the lease to be between £12,400 and £14,200 not including costs.
Last Autumn we were e-mailed by Mr and Mrs. T Petit , who purchased a studio apartment in Melbourne in February 1997. The dilemma was if we could shed any light on how much (approximately) price could be for a 90 year lease extension. Identical residencies in Melbourne with 100 year plus lease were worth £223,400. The mid-range ground rent payable was £60 billed annually. The lease expired in 2085. Given that there were 59 years unexpired we approximated the premium to the freeholder to extend the lease to be between £27,600 and £31,800 plus expenses.