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Buying a Property on Lease

It often creates a dilemma regarding buying a property on lease. It involves the materiality associated with the time remaining with the lease and reaps the benefit from such transaction. Rules applied to buying property on lease are the laws involved in conveyance in UK. The transfer of ownership in UK involves the lease term around seventy years or above and this leaves the new owner somewhat carefree with the issue of ownership. There are still few points; the purchaser should keep in mind before making a conveyance happen. The points are:

  • You should never go and buy a property which allows you to have lease for any less than 1 year or so. This is because, at this moment, you might think of buying the property for no more than a year, but with the time passing by, the decision changes. This is what I have experienced in my career in this sector and therefore telling you to keep it in mind.
  • If you are doing the conveyance all by yourself, there are many loopholes that make it possible for the seller to hide information from you require knowing. These are the information that can put you at stake and lease is one of them.
  • Often the sellers camouflage the cost and sell it at a price higher than the regular based on the area it’s located in. The issue of lease thus gets hidden by the extra amount you pay.
  • Even in the case where you look forward to selling it off by the end of a year, you should still extend the terms of lease as well the time associated.
  • There are certainly few reasons why we discourage you to buy property with such short term of lease in. There can be times when you will find yourself with a necessity to sell of the property in possession and then comes the question of lease. The sales price will fall drastically if you fail to make sure the property last with a least of at least 60-70 years in future. This requires you to extend the period of lease ahead of time that too before buying the property.
  • In case where you look forward to remortgaging the property to a third party, you will not get the desired customer on that note where the lease is for a shorter period of time.
  • Whenever you find a quote of a house being sold at a price less than the other such available in the market, note that, it often happens with the ones with short time lease.
  • A statutory lease of 90 years is available and it’s recommended that you make the utmost use of the same. A property is not bought for a year or two and you want to make the utmost usage associated with the same. Therefore, apply for extension of the lease even if it looks sufficient for you.
  • Remember, a property with a lease of maximum period can be sold afterword at a price higher and it certainly increases the value of the property.
  • It’s recommended that you apply for the extension of the property before the lease hits a period of 80 years. Beyond that, it increases the complicacy associated with extension of lease and makes it difficult for individual to deal in.
  • There is a basic rule for the new owner of the property that, the one applying for extension of leases needs to hold the property for at least 2years. Therefore, it’s better if you ask the seller to get it done for you. Otherwise, he can provide you with a statutory notice regarding his approval on your getting the lease extended.
Posted by on 22/03/2015 in Lease extensions

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