Our London based lease extension solicitors and lawyers specialise in lease extensions and enfranchisement issues. There are set procedures required to extend a lease, and these issues are becoming increasingly common as a prelude to selling a flat which has 70-80 years left to run. Our specialist London lease extension solicitors & lawyers have undertaken many transactions extending leases and such experience results in rapid and cost effective service on costs and advice to extend a lease. The term enfranchisement relates generally to purchasing the freehold interest, which generally gives leaseholders, whether in converted house or large block, greater control over management, and any premium paid to purchase a freehold can avoid the need for each leaseholder to pay a premium for extension of lease. Please contact us now for immediate free initial advice or a quote for lease extension or enfranchisement work.
We act both for landlords and tenants, and our services include, but are not limited to :-
• Extending a lease
• Right to manage issues
• Enfranchisement
• Preparation and negotiation of many types of licenses
• Drafting and negotiating new leases
• Drafting and negotiating variations to existing leases (Deed of variation)
• Preparation and representation at the Leasehold Valuation Tribunal
TOP TIPS FOR LEASE EXTENSIONS
1. Extend before there are less than 80 years left to run - The general rule is that the shorter the lease the more expensive it is to extend. Anyone with a lease approaching 81 years unexpired should seriously think of extending it as soon as possible. As soon as a lease has less than 80 years to run, under the relevant legislation the Landlord is entitled to calculate and charge a larger amount, based on a technical calculation, and somewhat strangely known as “marriage value” which is payable to the landlord.
2. Check your eligibility - A tenant cannot use the legislation to force an extension unless he/she/they have owned the flat for 2 years. Ownership is relevant not occupation. The original lease needs to be long (over 21 years) and it should be residential, as opposed to commercial use. The legislation does not apply to some landlords such as the Crown, National Trust and charitable housing Trusts, although the Crown usually complies with the principles of it.
3. Instruct an experienced, specialist solicitor -The solicitor will generally start the process by serving an Initial Notice on the landlord (although an informal, “without prejudice" offer may also have been made) , which will offer a premium for extending the lease. The process of extending a lease has strict time limits once the notice has been served and the Landlord may then serve a counter notice demanding a higher premium, with supporting evidence, or accept the offer made.
4. Valuer instruction - You will also need to instruct a valuer, probably a chartered surveyor, to put a value on the lease extension. He will use the valuation formula in the Leasehold Reform Housing and Urban Development Act 1993, as amended. Contact the RICS for a list of local surveyors who specialise in lease extensions. Get a quote in writing first. Most surveyors will charge a fixed fee to prepare the initial report which will avoid hidden extras and disbursements. This fee should cover the initial inspection of the property, reading the lease and making all the calculations. Obviously there are extra charges if the surveyor is asked to negotiate with the landlord or their agent or for any further work required if the valuation cannot be agreed. If they act for several flats in the same building they can usually offer substantial discounts so it's probably a good idea to team up together, if several of you are going down this route.
5. Be aware of costs - Once the Initial Notice is served on the landlord you will be responsible for his/her reasonable valuation and conveyancing costs, as well as your own. The Notice is also important in setting the valuation date.
6. Avoid agreeing other variations to the lease if possible - Under the Act you are entitled to a further 90 years on your lease with no ground rent payable on the original term or extension, but many if not most extensions are ultimately concluded by negotiation. It is quite common for a landlord to try and agree an increase in ground rent, as a condition for extending quickly and without waiting for notices to expire and/or applications to the Leasehold Valuation Tribunal has that is incorporated within the cost of extending. You still have to pay the service charge for the tribunal. However, such exchanges should be avoided if possible.
7. Increased value - Although there are costs involved, the upside is that after the lease extension, your property will usually be more valuable and saleable should you want to sell or remortgage. Buyers are often put off by short leases and mortgage companies won’t generally loan on properties with leases shorter than 60 years, although the exact cut off varies around the market.
8. Have finance/lender consent in place - There is not much to add under this heading, save that these extensions can often be done quickly, so have everything you need ready. In oreder to extend a lease a Land Registry application will be needed and this will consequently require formal consent from your lender, which clearly should be forthcoming without difficulty but may take a few weeks.
9. How Long Does it Take - Subject to how efficient you are, plus your freeholder, his solicitor, your solicitor and your surveyor, this whole process could take from 6 weeks to 12 months
10. Is there a going rate for the premium ? Whether marriage value applies or not, it is possible to ascertain with quite a good degree of certainty the likely premium, and thankfully for tenants, whilst the typical premiums are not cheap, they do not generally run in to the tens of thousands.
Please contact us today, whether you need to extend your lease or want to explore buying the freehold. Please either telephone us or complete our lease extension enquiry form.
