The Leasehold Flat with a Short Lease and a Missing Fire Safety Certificate

The lease has about 59 years left. The lender requires at least 70 years remaining at completion, so the lease as it stands fails the lender's criterion by about 11 years.

Options:

1. Lease extension. Amina can ask Tomas to extend the lease before completion, or to serve a notice under the Leasehold Reform, Housing and Urban Development Act 1993 to acquire a new lease. A statutory lease extension adds 90 years to the term and reduces the ground rent to nil, which would comfortably satisfy the lender. The premium must be negotiated and the process takes time, so 10 days is unrealistic unless a price is agreed and the landlord (the RMC) cooperates.

2. Informal extension by deed. The RMC can grant an extension by deed of variation or a new lease. This is quicker but requires the RMC's consent and may require the consent of other leaseholders or the lender.

3. Renegotiate the price and lender. Amina could ask the lender to waive the 70-year requirement. Some lenders accept shorter leases with a retention or a higher rate. She should obtain written confirmation before exchange.

4. Walk away or renegotiate. If neither extension nor lender waiver is available, Amina should not exchange. She should be advised of the diminution in value and the difficulty of selling on a short lease.

5. Timing. Exchange in 10 days is unsafe. The contract should include a condition precedent requiring either a completed extension or the lender's written waiver before completion. Amina should also check whether the RMC's articles or the lease permit extension and whether any other leaseholder's consent is needed.

Service charge. The three years' accounts and the current demand should be checked for arrears, balancing charges and whether the reserve fund is adequate. The £18,000 reserve across 12 flats is modest; the £6,500 per flat decoration estimate is substantial and may require a special levy. Amina should obtain a statement of account showing the position to the date of completion, an apportionment of the current year's charge, and confirmation that no arrears exist. She should also check the lease for the service charge mechanism, the landlord's covenant to insure, and whether the RMC can levy a reserve fund contribution.

Section 20 consultation. The consultation notice for external decoration at £6,500 per flat is a qualifying long-term agreement or a major works item. The statutory consultation process must be followed; if it is not, the leaseholders' liability may be capped at £250 per flat (or £100 per flat for a qualifying long-term agreement) unless the leaseholder agrees otherwise. Amina should obtain the full consultation pack, the notice, the estimates and the contractor's specification, and confirm the process was followed. She should also check whether the works have started and whether a section 20B notice was served within 18 months of the costs being incurred.

Fire safety. The absence of a current fire risk assessment for common parts with a single staircase is a serious issue. The Regulatory Reform (Fire Safety) Order 2005 imposes duties on the responsible person (the RMC) to assess risk. Amina's lender requires a satisfactory fire safety statement. She should require:

• a current fire risk assessment by a competent person;
• evidence that any remedial works identified have been or will be carried out, with a timetable and funding;
• confirmation from the RMC that the assessment is satisfactory and that no enforcement action is pending;
• a warranty or undertaking from the RMC to maintain the assessment.

Before exchange. Amina should require: the lease extension or lender waiver; the service charge statement and arrears confirmation; the section 20 consultation pack and confirmation of compliance; the fire risk assessment and remedial plan; and a retention or price adjustment to reflect the special levy. She should not exchange until these are satisfied or the contract makes completion conditional on them.