It is important to extend your lease because a lease is a wasting asset. If your lease has less than 70 years left to run you are likely to encounter problems when you try to sell your leasehold flat.
People who own and live in their flat as well as owners of residential flats who let their flat and companies who do likewise, have the right to extend their leases in certain circumstances. The right is given by the Leasehold Reform, Housing and Urban Development Act 1993 (as amended by the Commonhold and Leasehold Reform Act 2002). The Act allows the existing lease to be extended by adding an additional 90 years to the existing unexpired term of the lease with any ground rent that you presently pay being reduced to a “peppercorn” (which means no rent) upon completion of the lease extension.
An extended lease will make your flat more desirable to a buyer and a lender.
You must hold a long lease i.e. a lease which when originally granted must have been for at least 21 years (please note some special shorter leases and a few other special types of lease also qualify) and you must have owned your flat for at least 2 years (again there are some exceptions to the 2 year rule).
A landlord can object to granting a lease extension on very few grounds as it is your right under the Act. Please note that some types of landlord and some types of buildings are exempt from the Act.
You will have to pay your Landlord an amount of money for the lease extension this is called a premium. The premium payable is based upon a mathematical formula which takes into account the ground rent the landlord will no longer be receiving and term currently remaining on your existing lease. If your lease has 80 years or more left to run the premium will be less than it would be if your lease has less than 80 years remaining. The fewer years remaining on the lease the more expensive the premium becomes.
Preparing the information for the claim
Serving the first notice on the competent landlord and copies to any other landlords
Responding to the landlord's requests for further information
Conveyance of the new lease
The landlord must be offered a realistic price for the extension, if not any notice served on the landlord may be void. Therefore, it is strongly advised to obtain a professional valuation by a Surveyor who is familiar with the procedure under this complex Act. G M Hewett Solicitors can put you in contact with surveyors who are experienced in this field.
The tenant will have to pay the landlord’s legal costs, valuation costs and disbursements in connection with the lease extension.
Other disbursements include Stamp Duty Land Tax if applicable and Land Registry fees.
This firm would be delighted to act on your behalf. Please contact this firm for a discussion and a free quotation of this firm’s legal costs.
This firm also deals with leasehold extensions and enfranchisement of leasehold houses.
Note: The above information is intended to be very general. Do not rely upon this information as you need professional legal advice which relates to your own personal circumstances.