Lease Extension Premiums. Difference between Notting Hill Housing and Genesis Housing Association.

 

This is not legal advice! You need to get legal advice from a lawyer. 

It appears that shared owners of what was Genesis Housing Association are being treated in a worse way than shared owners of Notting Hill Housing.

We have asked shareholders to raise this with the Management and Board.

What is the problem?

It appears that those who were shared owners at Genesis are being asked to pay the full Lease Extension Premium – even if they own less than 100% of the equity.

Notting Hill Genesis say that Notting Hill Housing shared owners pay the same percentage of the lease extension premium as they own equity.

So that means if you have 25% of the equity then you pay 25% of the lease extension premium.

Whereas a Genesis Housing Association shared owner who owns 25% of the equity still has to pay 100% of the lease extension premium

This seems morally wrong to us. It also puts even more pressure on shared owners many of who are already struggling under the pressure of high service charges and rent increases.

So this is what we have found out.

Please note we are not lawyers, you need to get legal advice:

When a lease gets to 82 years it is wise to start the process to extend the lease because 80 years is when ‘marriage value’ kicks in.

‘Marriage Value’

What is the Marriage Value? It is the “the increase in value thanks to the extension (1).”

In an example given in Lease-Advice (2) the difference in the example they use is £25,182 for a 50 year lease outstanding and £2,207 with a 95 year lease outstanding.

The lease extension can take a long time, and in some cases as long as 18 months, often dragged out by the freeholder so as to get past the ‘marriage value’ cut off.

There may be a problem with shared owners though. In a legal note from Lease-Advice (3) it states that:

“A shared ownership leaseholder of a flat only qualifies for the statutory right to extend their lease as the holder of a “long lease” if they have “staircased” up to 100% ownership. However, the landlord may have their own policy of allowing lease extension where there is less than 100% ownership. Leaseholders would need to check with their landlord.”

So see below information about ‘informal’ lease extensions links:

The truth about informal lease extensions

Informal lease extensions are pure poison!

You may not realise that actually get a completely new lease.

Another thing is that when you extend your lease, you actually get a completely new lease.

This may have covenants in it and so it requires a real leasehold specialist who is working for you to make sure that NHG have not inserted more clauses in to benefit the freeholder (NHG) for the losses of ground rent by adding additional charges. Use one recommended by The Leasehold Knowledge Partnership or Louie Burns or the National Leaseholder Campaign would be the way to go.

Please note the Genesis Housing Association website used to have a warning to residents about lease extensions – but we cannot find this on the new website. The warning read:

“Genesis will take the opportunity to determine new lease terms if an extension applications is made.”

There are a few places that we can signpost for help and sources of information.

The first thing is to keep in contact with Genesis Residents and keep us informed.

Secondly, please have a look at the Leasehold and Common Hold Reform paper produced by the House of Commons Library on 13 July 2018

https://researchbriefings.parliament.uk/ResearchBriefing/Summary CBP-8047#fullreport

Also:

If on Facebook then also you really must join the National Leasehold Campaign group on there.  It is a fountain of information and support at times of despair!

There will be others who have been in your situation or can steer you in the right direction.
https://www.facebook.com/groups/786983251448976/about/
https://nationalleaseholdcampaign.org/

The Leasehold Knowledge Partnership is fantastic and a charity working to help leaseholders.

They get no financial help from government and work tirelessly attending APPG meetings etc so they are quite swamped but always worth contacting too.

Ask Louie Burns: The leasehold houses scandal and what you can do about it

Two other agencies working to help Leaseholders and very active helping the campaign.

Leasehold Law

Louie Burns book to help Leaseholders and the pitfalls to look out for – on kindle and the sales money goes to the campaign.

If shared owners of NHG want us to write to the Chair/CEO of NHG for clarification on this issue, we will (assuming shareholders get any answer). But if you already have a reply from NHG about this please pass it on.

When – and if – we get a NHG reply through the shareholders of NHG we will Post it here.

Once again:

This is not legal advice! You need to get legal advice from a lawyer. 

Extending a Flat Lease – The 80 Year Trap

Lease extension calculator

Shared Ownership Leases

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