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I'm in the process of buying a porpoise built flat that is on the first floor of a house . It have found out that is Underlease rather than a lease ( ie 95 years long) and I've never heard of Underlease so I was wondering if anyone could advise me on any disadvantages of being an Underlease holder . The lease holder is a big property trust and I don't know yet who the free holder is.

I was hoping to convert the loft in this property but I'm anticipating that having to deal with two parties to get permission could be an issue.

I would be very Grateful if anyone would throw some light into what difference this could make

Thanks a million

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  • 3 weeks later...

Hi Silvina,


I have brought two flats with an under lease and actively manage a couple of blocks whereby I act for the head leaseholder and there are under leases below and a freehold above. In general this structure works fine, although there have been some times when it is frustratingly difficult to track down the freeholder to get permission, but that is for the head leasee to deal with (in most cases).


In this case I would get really familiar with what both the lease and the head lease states in regards to getting consent for alterations (you solicitor should do this for you, but it is worth you having a read too). In most cases consent cannot be unreasonably withheld providing that it is not affecting the structure or any other part of the building i.e. you are only doing works on your flat. However the head lessee / freeholder might put some requirements on the consent such as getting building control sign off / the type of contractor you use / they might require you to pay for any fees associated with granting consent, such as legal and building surveyor fees and I have seen some cases where the freeholder will demand a fee for you doing the works and adding value to the property.


I have assumed for the above that you will be buying the loft space as part of the flat? I would also check out how the service charge % is split - if the loft space is currently unused chances are they haven't included it within the service charge %, if you were to start using it, it becomes classed as usable space which could mean that your head leaseholder wants to re-measure to change %'s. (Please note that usable space is anything with a head height over 1.5m). Just bare this in mind because it could come up!


Everything above is very much overcomable but you need to know what they will require when buying the lease. So get your solicitor to ask as part of the sale process, then budget for it as part of the renovation costs and see if the figures still stack up for you!


I hope that helps, Natasha 

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