© 2025 News On The Block. All rights reserved.
News on the Block is a trading name of Premier Property Media Ltd.
© 2025 News On The Block. All rights reserved.
News on the Block is a trading name of Premier Property Media Ltd.
QUESTION
"My mother left her flat to my stepfather and me (50/50) when she passed away in March 2018. Since then, my husband has fully renovated the property, but due to delays with probate and COVID, the sale has yet to take place. My stepfather is now growing impatient and has instructed a solicitor to push for a sale. However, I believe the flat will be worth significantly more with a new lease under the upcoming Leasehold Reform Bill. As the sole Executor, I have been waiting for these changes to come into effect. When do you expect the new leasehold reforms to be implemented, and what impact could they have on the value of the property?
I recently received a letter from the freeholder offering me the opportunity to purchase the freehold before they put it on the open market. The property is a converted house with four flats, and I am unsure whether I can buy the freehold alone or if I need the other leaseholders to participate. If I were to buy it, would I be able to grant myself a new lease, and what are the potential risks of owning the freehold?
My stepfather wants to sell the property immediately, but I would prefer to wait until the leasehold reforms are finalised, as I believe the flat will be worth much more. Since there is no mortgage on the property, is it possible to borrow against the estate as an Executor to pay my stepfather his share now? This way, I could hold onto the property until the reforms take effect. What are the legal and financial considerations of this approach?"
ANSWER
There are several things to consider here. Firstly, you say that you are the sole executor of your late mother’s estate and that the beneficial entitlement to the Estate is 50/50 to you and to your stepfather.
There appears to be a difference of opinion about what should be done with the property and your mother passed away some time ago. You do not mention who is living in the property but presumably there may be rent or other income that the estate is receiving in the meantime. Also, we assume that there are some other reasons as to why probate has not been obtained to date? Given that your mother passed away in 2018 there has been a significant time delay in getting to the point at which the flat is to be dealt with. We therefore assume that there may be other assets in the estate and that it is complex.
Generally speaking, an executor has ‘the executor’s year’ i.e. 12 months from the date of death, before being obliged to make distributions to beneficiaries. You do not say whether there is rental income and if so whether this is distributed or whether one of you is living in the property and paying the Estate rent for this. If this is the case, then there are also tax considerations which will need to be considered.
The question of when the reforms will come in is of course something of a ‘how long is a piece of string’ question and our best estimate at the moment is that it may be a further 18 months to two years before these come into effect, allowing for primary legislation to fix the known issues with LAFRA 2024 and also the unknown quantity of how the reforms may (if at all) be affected by the Human Rights Act Challenges currently before the courts.
As executor your primary duty is to realise the Estate’s assets so as to distribute these to the beneficiaries. Whilst we can see the attraction in considering borrowing against the flat, it would be wholly inappropriate for the executor to speculate on the property market with estate assets. Likewise, the prospect of borrowing is very unlikely as unless the will allows the executor the power to borrow (which is rare) then it is not clear that you have this power. Even if you did, the fact that you are only entitled to 50% of the property is going to make this an unattractive and complex lending decision.
If you do want to keep the flat on the current lease and then consider what will happen when and if the reforms are enacted the best solution would be for you to buy out your stepfather. For this to happen valuation advice would have to be obtained as to the likely value of the flat and then having obtained probate you would be able to buy his share out having first agreed this. This would require an open market valuation for the property and your stepfather would also have to be independently advised. The funds would have to come from elsewhere, either savings or remortgaging another property that you own given that these cannot be raised on the flat itself.
The letter from your landlord offering you the chance to purchase the freehold may well be an opportunity - although you must bear in mind that as there are four flats in the building the freeholder must offer it first to all of the flats under the ‘right of first refusal’ (Landlord and Tenant Act 1987).
If this is done, once a ‘section 5 notice’ has been served and the initial two month offer period has expired then the freeholder would be free to sell to you in your own name. If the flat owners were to accept the offer, then three out of the four flats would need to act together. We assume that the offer would be made initially to both you and your stepfather as the ‘qualifying tenant’ of the flat as executors. Similar points to those mentioned above would apply to the question of buying out his share, and/or proceeding together.
You would need to bear in mind that purchasing the freehold to the whole block will (probably) be much more expensive than purchasing a lease extension in respect of the flat itself, not to mention more complex as it will require the participation of the remaining flat owners.
One other thing that you might like to enquire about from the freeholder, given that you are in dialogue with them, is whether they might be prepared to ‘do a deal’ to grant you a lease extension on a voluntary basis that could complete when the flat is sold. That might allow resolution to the current impasse but would most likely be at today’s value rather than taking into account the possibility of future reforms.
If you have a query concerning leasehold property, then please contact the expert Bishop & Sewell Landlord & Tenant team by emailing leasehold@bishopandsewell.co.uk or calling (0)20 7631 4141.
The above is accurate as at 15 April 2025.
The information above may be subject to change.
The content of this note should not be considered legal advice and each matter should be considered on a case-by-case basis.