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Marriage and Lease Extensions; understanding the provisions relating to joint ownership can be of real value
In order to be able to serve a s42 Notice under the Leasehold Reform, Housing & Urban Development Act 1993 to force a statutory lease extension, a Flat Owner must have owned the flat for at least 2 years. This is taken to mean that the Flat Owner must have been registered at the Land Registry for a continuous period of two years before the “relevant date” (i.e. the date on which Notice is served) as it is only upon registration that the Flat Owner is regarded as the legal owner of the lease (it is not the date of completion of the purchase).
If you currently own the flat in your sole legal name, and are seeking to add a partner, spouse or other family member onto the title documents as a joint legal owner then you should take legal advice before you make any plans; especially if you are also considering a lease extension in the future.
Getting the right expert advice can be the one thing that saves you thousands of pounds. An example is as follows; Mr and Mrs Smith recently got married. Mr Smith had owned his flat for 5 years and, upon their marriage they wish to add Mrs Smith to the legal title. The lease on the property currently has 81 years remaining. Mr and Mrs Smith go and see a conveyancer and she is added to the title (subject of course to any lender’s consent). The couple then want to extend the lease. Mr Smith has owned the property for 5 years, but Mrs Smith had only just been added to the title and so has owned for no time at all, at least not the mandatory 2 years as required under the 1993 Act. Mrs Smith cannot benefit from Mr Smith’s ownership; as references in the 1993 Act to the “qualifying tenant” is taken to be a reference to all persons who constitute the qualifying tenant. The result is that they couple will now have to wait for two years until they both fulfil the minimum ownership requirement. By this time the lease will have dropped to 79 years and so is under the magic 80-year mark, meaning that the premium payable to the freeholder will have risen significantly.
Taking specialist legal advice at the outset would have saved Mr and Mrs Smith thousands of pounds, as it stands they are currently facing a significant premium and a two-year delay, which may affect their ability to sell the flat in the meantime should they wish to move.