When a person passes away it is common that their loved ones must deal with their financial affairs.
Sometimes this includes dealing with a lease extension of a flat. Usually, it is possible to start a lease extension shortly after someone has passed away.
This should be done before the property is transferred to their beneficiaries. This is because the beneficiaries would usually have to wait two years from the date they inherit the property, before they are entitled to extend the lease on their own behalf.
This article explains how to extend a lease when someone has died.
It is worth noting that this article has been written for circumstances where a lease extension has not yet been started, rather than one where a lease extension is ongoing.
This article does not constitute legal advice and you should complete your own research or seek advice before relying on it.
Purchase Title Register
If you want to extend a lease on a flat when someone has died, the first thing you must do is purchase and read the Title Register. You need to check how long the property was owned and how long they were the registered owner for. This is the date in brackets below – i.e. 1 August 2020.
Please see an example below:
Understand Ownership Structure
Once you have purchased the title register you can ascertain how the lease can be extended.
Their personal representatives are entitled to serve notice on the landlord for a lease extension so long as the deceased has been the registered owner for more than two years at the time of death. It is noteworthy that this is not the date that they completed the purchase transaction, but the date the purchase was registered at the Land Registry. In the example above this is the date in brackets – i.e. 1 August 2020.
To avoid any opportunity for dispute, the Personal Representatives may find it advisable to wait until the Grant of Probate / Letters of Administration have been granted before serving notice. These will also be needed to conclude the transaction and when the lease extension is registered at the Land Registry.
Multiple Owners – “Tenants in Common”:
If there are two owners, then it is possible that they own the property as Tenants in Common. This is particularly common where a property is owned by friends or siblings, who might want to own shares of the property separately.
The property could be owned in equal shares (e.g., 50% each) or unequal shares (e.g., 60% / 20% / 20%).
You can usually tell that a property is owned as Tenants in Common if the following restriction in the Title Register is present. You should be able to get a categoric answer by asking a solicitor.
If the property is owned as Tenants in Common and one more of the owners has died, their respective Personal Representatives will need to engage with the lease extension process on their behalf in the same way as if they had been the only owner. See the section above.
Multiple Owners – “Joint Owners”:
A common type of property ownership is Joint Ownership, which is essentially where both owners collectively own 100% of the property. This is particularly common between married couples.
In this case, if one of the owners dies then their ownership of the property automatically vests (which means becomes owned) by the surviving owner.
In this case, the surviving owner will not need to wait until probate is granted to start the lease extension – but they do have a decision to make before they start the process.
Option 1: Amend the Title Register before extending the lease
Usually where a Joint Tenant dies, the Land Registry will remove their name from the Title Register free of charge – although it can take a couple of months for the change to be made.
To do this you will need to send the Land Registry a Deceased Joint Proprietor Form which you can find here. Making this change shouldn’t affect the date that the surviving owner became the registered proprietor, but we would recommend sending the form with a cover letter (example) which explicitly asks them not to change this to avoid a mistake being made. You will also need to send a copy of the Death Certificate.
The disadvantage of this approach is that it may delay starting the lease extension – because it will take time for the Land Registry to process the form. You also need to have been the registered owner of a property for two years before you can do a lease extension and it is possible (but unlikely) that the Land Registry would accidentally reset the clock when they remove the deceased owner’s name. We’ve not found this to be a problem in practice.
The benefit of this approach is that you will know that the remaining owner will be listed on the Title Register as the sole owner of the property when the start the lease extension is started, and you know that the freeholder cannot be difficult. This is the option we recommend.
Unfortunately, removing the name of a deceased owner is not something Homehold to do for you, because we do not complete this type of transaction. However, if you are not keen on doing it yourself, we can recommend a solicitor who will do it for you.
Option 2: Extend the lease without amending the Title Register
The second option is to start the lease extension before amending the Title Register and don’t update the title until the new lease is registered.
The advantage of doing this is that you save some admin and do not have to wait until the Land Registry updates the title register before starting the lease extension.
The disadvantage is that your freeholder may try to argue that the surviving owner does not have the right to extend the lease while the deceased tenant is listed on the title register – although it seems unlikely and they would be so heartless to take this position. In addition, the counter-argument to this is that the title automatically passes to the surviving owner on the passing of the other owner and we believe this to be correct. However, our experience is always that it is better to avoid a dispute than win one.
The article above should provide a starting point on how to extend a lease when someone has passed away.
If you wish to instruct us to manage the lease extension process, please get in touch.
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