If you already own or are buying a leasehold property it is important to consider the unexpired term of the lease.
It is less expensive to extend the lease whilst it still has 80 years or more to run. This is because the premium payable to the landlord will include a “marriage value” where a lease has less than 80 years left to run.
Where the lease has less than 80 years to run, it is probably even more critical to start the extension process sooner rather than later as the “marriage value” will increase over time.
The lease and the leaseholder have to both qualify before you have the right to extend the lease using the statutory process. If instructed, we will make the necessary checks for you but generally, you have to have owned the flat for at least 2 years and the lease should be a “long lease” ie over 21 years.
You will need a valuation of the lease premium by a specialist valuer or you may wish to instruct your own valuer. A Notice of Claim is then served upon the freeholder and/or intermediate landlord/s offering the premium and any other terms upon which you require the extended lease. The landlord has two months to serve his Counter Notice in which he will either accept or reject the terms offered. At this stage, the landlord is entitled to a 10 % deposit.
The parties then have six months from the date of the Counter Notice to reach settlement as to the premium and the lease, failing which you must make an application to the First Tier Property Tribunal (FTT) for final determination. A failure to make such an application within the time limit will render the Notice of Claim withdrawn and you will be barred from serving another Notice for twelve months. You will also have to pay both parties’ costs up to the date of withdrawal.
The lease extension process can take from 6 months to 2 years to complete depending on whether the price and the terms can be agreed easily.
Unlike conveyancing fees, we cannot give you a fixed quote for the fees until we have looked at the particular circumstances of your possible extension. We do however, have competitive rates and will give you an estimate once we have seen the papers.
Once a Notice of Claim is served, you are responsible for payment of not only your own costs throughout the process but also all other parties’ reasonable costs, whether or not the lease is extended. It is therefore imperative that a lease extension is considered carefully at the outset and that the funds are available at some point. A Notice of Claim can be withdrawn at any time, but it will mean payment of all parties’ costs up to that date.
We can act for you in all aspects of leasehold extensions or collective enfranchisement. Click here for our short guide for further information.