We were asked to assist in the estate of a Spanish lady who lived in London for most of her life. She died without a will. Her Spanish family members, who were inheriting her estate under English intestacy law, did not speak English. A relative who was fluent in English obligingly acted as their attorney, applying for a Grant of Representation to deal with the estate. The estate included a flat.
Upon instruction we noted that there was a leasehold property which formed part of the Estate that would need to be sold together with bank accounts. Our client and the beneficiaries were totally unfamiliar with the English property market and how transactions work.
From the outset Sarita from our property team and Miriam from our private client team worked together to achieve the best results for the client.
As part of our instructions on any sale, we reviewed and investigated the flat’s title documents and advised our client of potential issues in relation to it. Our investigations revealed that there was only 60 years remaining on the lease. Most mortgage lenders won’t lend on a term less than 80 years which would reduce the pool of potential purchasers and in turn the market price. Once we had advised the client of this, we explained the merits of extending the lease, explaining that there are two ways in which the lease could be extended, the formal route more commonly known as the Statutory Process and the Informal route. We advised our client that the best option was to use the Statutory Process, as explained below.
To make a lease extension claim under the statutory process, you must have:
(i) A long lease of a flat. Generally, a lease is a long lease if it was originally granted for a term of more than 21 years. Most flat leases qualify, assuming the flat is used for residential purposes.
(ii) The leaseholder must have owned the lease for at least two years. The period of ownership is measured from the date you became the registered owner of the lease at the Land Registry. You do not need to have lived in the flat for two years, only owned it.
This matter was different in that the personal representative would need to extend the lease. Many personal representatives are unaware that they have the right to extend the Lease under the Leasehold Reform Housing and Urban Development Act 1993 (‘The 1993 Act’), they just need to make sure they serve the Section 42 Notice to extend the lease within two years of Grant of Probate. The deceased owner still needs to satisfy the qualifying conditions.
The matter was further complicated, by the introduction of the Leasehold Reform Act 2024 which is supposed to be making the process of extending leases cheaper and easier but as we await the details it was a matter for our clients to decide what was the best way forward, the current legislation or waiting to see if it would be cheaper to extend at the later date. With a personal representative sale, it is important to have a quick resolution so that the family can move on and realise the estate. In this instance the personal representative decided on using the formula and premium already agreed and it worked in both the Landlord’s favour, to the buyer’s advantage and the best result for the personal representatives who managed to sell the property quickly and that too at the best possible price.
My colleague Miriam Spero talks about the intricacies of acting for personal representatives who are based abroad in her case study. It is important to note any issues at the outset of the transaction and we work in a collaborative and proactive manner in achieving the best result for our clients.
