Lease Extension/Completion

[joeybinx]

Hello, I hope that someone can help! We are purchasing a flat and the vendor has already applied for the lease extension to go through. We have a draft copy in the paperwork sent to us by the solicitors. We are at the stage now where we are ready to exchange contracts and subsequently complete, and this lease is now holding everything up.

Our solicitor did say that she has taken out an "undertaking" regarding the lease as it has not yet come through even though we are ready to exchange contracts. Does this mean that we can complete and the undertaking will then ensure the lease will be finished after completion?

It's the first time we have bought a place and we are quite confused about what this undertaking means - and if this is the case why could it still be holding everything up?

I hope you can help.

[JustinN]

Whether the undertaking (a commitment by, presumably, the seller's solicitor to do or produce something) is sufficient protection for you depends on its exact terms, and I do not think it is likely to be the cause of delay, anyway.

One method of dealing with a lease extension and a sale at the same time might be for the seller to assign the benefit of the right to extend the lease to you, so that you complete the extension, but I suspect your mortgage lender will only lend on the basis that the lease is extended first

In which case, the procedure should be that the seller first extends the lease then transfers the extended lease to you. However, I imagine that the seller needs the sale money in order to pay for the extension, so the extension and the sale have to be completed on the same day

In those circumstances, the undertaking by the seller's solicitor would be that, on receipt of the purchase money from your solicitor, the seller's solicitor will complete the extension, then immediately complete the sale to you - there should be no problem in getting that undertaking

The only thing likely to be delaying exchange of contracts and the fixing of a completion date is getting the landlord to agree a fixed date to complete the extension

[joeybinx]

Thank you for your reply JustinN - we are waiting for a callback from our solicitors to try and find out what the hold up actually is. It is reassuring that with this undertaking we can still complete the sale as time is running out for us. (we are currently renting and the landlords have sold the property we are living in and this delay is making things awkward between us all- never good!)

Thanks again.