Lease Extension - Add Value to Your Property
Extending the lease on your property can significantly increase its value and if you are thinking of selling your property a longer lease will also improve its saleability. Since the passing of the Leasehold Reform, Housing and Urban Development Act 1993 it has become easier for leaseholders to either extend their lease by 90 years or purchase the freehold of their property, known as Leasehold Enfranchisement.
It can be more expensive for you to extend your lease if the remaining term is less than 80 years as the Landlord would then be entitled to what is known as “marriage value”. It is therefore advisable to extend your lease before it falls below 80 years.
The Landlord is entitled to charge for the lease extension. If you follow the statutory route, the amount you will pay is based on a formula which is set out in the Act. The Lease Advisory website has a calculator which will give you an estimate of how much you will pay your Landlord to extend your lease by an additional 90 years. In addition to paying the Landlord you will have to pay for legal advice, a lease extension valuation report which will be prepared by a surveyor, Land Registry fees and your Landlord’s legal and valuation costs.
How to extend your lease – the Process
The standard steps in the process are:
- Talk to a solicitor who has expertise in lease extension, such as one of the Bird & Lovibond property solicitors and get a quote. You may be tempted to avoid using a solicitor. We would advise against this because it is a reasonably complex process and acting for yourself could result in you paying a significant amount more for your lease extension. In addition the freeholder may take the opportunity to adversely change the conditions of your lease. Taking the statutory route also provides you with more protection if a dispute arises.
- Get a valuation from a surveyor with expertise in leasehold extension. We can put you in contact with a surveyor if you prefer.
- Once a valuation has been obtained your solicitor will discuss with you how much you are willing to pay for your 90 year lease extension. Your solicitor will then make a formal offer to your Landlord, on your behalf by serving a Section 42 Notice. This will include the amount you are willing to pay for the lease extension.
- Your Landlord has 2 months in which to respond with a Counter Notice. This will either accept your offer or state the amount that your Landlord requires.
- There will often then be a period of negotiation to reach agreement on the amount to be paid to the Landlord. Your surveyor will negotiate on your behalf.
- If agreement is not reached after 2 months you can request that your solicitor refers the decision to the First-tier Tribunal (Property Chamber). However this can be an expensive process and is best avoided.
If you would like help with your lease extension contact one of our property solicitors.
Uxbridge (01895 256151), Ruislip (01895 636037), Greenford (020 8578 6936) or email email@example.com.