Can I force the board of directors to agree to a lease extension?
Q: The other homeowners in my development and I collectively own the freehold of the development by way of a limited company which is managed by some residents and a managing agent.
I have been waiting 8 months for a leasehold extension on my flat to be signed by the board of directors of our company. The board has been sitting on my extension for 8 months and have indicated that the managing agent wants £10-20,000 to put into the reserve fund. I don't want to do this but need an extension to remortgage. How can I force the board to agree to the lease extension?
Did you sign a participation agreement when you agreed to participate in purchasing the freehold? I always advise my clients to do so. The agreement can set out all sorts of matters between the participating leaseholders including the terms on which their leases should be extended once the freehold is acquired.
In the absence of a signed participation agreement, the best you can hope for is to be able to establish an agreement on the basis of other communications, oral or written, that your lease should be extended at no premium (additional cost). If there is no trail of communications recording the agreement then you should serve the current freeholder with a section 42 notice seeking to exercise your right to a lease extension under the Leasehold Reform Housing and Urban Development Act 1993. In this way you would be able to benefit from the rigid timescales for completion imposed by the Act as well as by the prescribed valuation method for the lease extension premium. Had you served such a notice 8 months ago, you would probably have completed the grant of the new lease by now.