Leasehold extensions – your rights
Were you aware there is legislation giving owners of leasehold flats and houses the right to increase the value of their property by extending their lease?
Our lease extension solicitors specialise in leasehold enfranchisement and lease extensions both for clients locally in Wiltshire, Hampshire, Somerset, Dorset and Berkshire and throughout England and Wales. Extending lease and freehold purchase is all they do and our 5 strong team is one of the most specialist anywhere in the country.
Got a lease extension question? Call our specialist solicitors on FREEPHONE 0800 1404544 for FREE initial phone advice – with no strings attached.
Why do I need a Lease Extension?
A short lease can really undermine your ability to sell your flat for a decent price – and now is the best time for your lease extension.
- Since the last recession, many mortgage companies have amended their lending policies and increased the minimum lease term they are prepared to lend against. This means it has got much harder to get a mortgage on leases with even as many as 70 years left.
- An extended lease makes your property much easier to market and sell
- Your lease is a diminishing asset – the term drops daily regardless of a good or bad economic climate. Not only is the value of your property dropping as the remaining lease term gets short, if you don’t extend your lease then when the lease ends, the you will either have to move out, or take the low-security option of trying to negotiate a rent from your freeholder
- The cost of your lease extension is partly set by the value of your flat when you come to extend your lease. That means while your property value continues to rise, your lease extension is becoming more and more pricey
- A lease with 80 years or less remaining is increasingly expensive to extend as the freeholder is able to charge an additional premium – which is known as the “Marriage Value”. This additional charge applies when you come to exercise your lease extension rights
How our Specialist Leasehold Extension Solicitors can help
In addition to leasehold extension, our leasehold team regularly advise leaseholders and freeholders alike on a range of similar specialist subjects including:
- Claims for lease enfranchisement (also called collective enfranchisement) which is the right for tenants to join together (under the Leasehold Reform Act 1993) to force their landlord to sell the freehold of their block of flats to them. Click here to read more about enfranchisement
- Exercising your right to manage your block. Click here to read more about the RTM process
- Grant of new leases
- Deeds of variation
Our solicitors are highly experienced in this specialised area – with over 25 years experience in dealing with up to 400 leasehold extensions every year.
Who do we represent?
Our specialist Leasehold Extension Solicitors represent individual leaseholders as well as property management companies, landlords and residents associations, providing jargon-free legal services and practical legal advice. We offer a FREE initial telephone consultation.
Although we’re always happy to meet you, most of our nationwide lease extension and enfranchisement clients deal with us by e-mail, phone and Skype, avoiding the necessity of meeting face to face. Although our local clients are more than welcome to visit us at one of our local four offices – Salisbury, Andover, Fordingbridge and Amesbury. So wherever you live in England and Wales, for legal advice from specialist Lease Extension Solicitors, contact us today.
How do we get started?
Once you have appointed us to deal with your lease extension, the next stage is usually to appoint a specialist chartered surveyor to value the planned Leasehold Extension. You need to ensure you’ve appointed someone specialising in extending leases.
Our team also regularly work with surveyors who specialise in Leasehold Extensions and Freehold Enfranchisement cases and can assist you select the right one from our specialist surveyor panel.
Lease extension – acting for freeholders
Freeholders as well as flat-owners will need expert legal advice when it comes to the lease extension process and our leasehold reform specialists have extensive experience in protecting the interests of freeholders.
Statutory lease extension
If you, as the freeholder, receive a formal request for statutory lease extension, you’re going to need specialist legal advice for the following reasons:
• It is important to check that the statutory notice is legitimate and whether you are compelled to grant the extension
• The premium stated in the notice may not be big enough – in which case you will need a solicitor to issue a counter notice demanding a higher premium
• You will have to negotiate this premium if it leads to a dispute
• you will need to comply with both the timetable and complicated procedure involved in finalising any lease extension.
As there are time limits involved in the lease extension process, it’s really important that you get specialist legal advice at the earliest opportunity.
Non-statutory lease extension
If a leaseholder informally asks for a lease extension you not required to negotiate or even respond. However our specialist lease extension team can help you negotiate a better deal – perhaps a higher premium, better ground rent terms and we can also help you negotiate and grant a lease shorter than the statutory 90 year period.
Sale of the freehold
We can also help freeholders when they are approached by leaseholders looking to buy their share of the freehold a process is sometimes referred to as ‘freehold purchase’, ‘collective enfranchisement’ or ‘lease enfranchisement’.
6 Common Lease Extension Mistakes You Need to Avoid
If you are a flat owner who does understand the legal right to extend your lease and are thinking about taking that step at some point in the future, there are some key mistakes which you should do your best to avoid. Each of them are quite likely to increase the cost of extending your lease.
1. Falling into the 80 year trap
The first serious mistake is putting off applying for a lease extension and allowing the term remaining on the lease to drop through the milestone of 80 years remaining.
Why is this date so important? Well, on the exact day which your lease passes the 80 year mark, your freeholder can then charge you an extra fee known as the “marriage value”. Even if your property is reasonably priced, this marriage value can add several thousands of pounds onto the cost of the lease extension. Therefore it is really important to extend your lease well in advance of that 80 year mark.
2. Not getting a proper lease extension valuation
It may be tempting to cut corners and save some cash by doing without a formal lease extension valuation. But if you don’t employ your own lease extension surveyor to value your lease extension, you’ll be relying on the valuation produced by your freeholder’s own surveyor – which May will be significantly more expensive.
Don’t be tempted either by a cheaper “desktop valuation” – one done in an office, using paperwork and documents supplied to the valuer and without a physical examination of your flat. This type of valuation is probably cheaper but it won’t take account of the fish for condition of your property.
On a similar subject, never rely on one of the automatic online lease extension calculators. These can be quite useful in giving you a very, very rough initial idea of the kind of premium you might have to fork out – but should never be relied on when it comes to negotiating the premium you’re actually going to have to pay your freeholder.
3. Understand the risks of an informal lease extension agreement
Even if you have a good relationship with your freeholder, you need to be aware of the risks in agreeing to a voluntary lease extension.
An informal agreement gives you no fallback protection and means you could fall victim to an unscrupulous freeholder. It can work perfectly well – but your freeholder is in control.
Many freeholders have has been known to agree a price to extend the lease informally, only to drag things out and then refuse to agree to a voluntary lease extension. There is nothing you can do about that, and it means that you will have to start the formal process from the beginning. There is a particular danger if the remaining term of your lease is approaching 80 years.
In this case, if your freeholder can drag the process out until the term left on the lease drops down to 79 years and 364 days, he can then forced you to the “marriage value” – see above. And that can cost you thousands of pounds.
4. Failing to plan in advance
Leaving things to the last minute is always going to make a lease extension more expensive. Doing things well in advance is going to result in less stress, and probably less expense too. Remember that there are two main factors which increase the cost of extending your lease – the length of the term and the value of your property. So if your property is gaining in value and the lease term is dropping the price you need to pay is going up on two fronts.
5. Paying too much for the lease extension
Every day which you put off contacting a specialised solicitor about your lease extension, it is costing your money. Given that part of the price of the lease extension is based on the market value of your property, at a time when house prices are rising rapidly, you are going to have to pay more to extend the lease with each week or month you delay.
6. A DIY lease extension
Don’t even consider trying to manage the legal lease extension process by yourself. We have enough problems working with experienced conveyancing solicitors on the other side who regularly struggle to get the procedure right and regular make mistakes!
The procedure extending a lease can be tricky, and keeping too tight deadlines is essential. Don’t just choose the first property solicitor you come across either. Take time to find one of relatively few really experienced lease extension solicitors – even if that means you have to deal with them by phone or email rather than in person.
Most solicitors who cover conveyancing and property law work rarely deal with a lease extension. Many have never dealt with one at all.
Over the years we have come across plenty of horror stories – on one occasion, a leaseholder rang us up for advice and said her own solicitor had told her to call us to find out what to do because he had never done a lease extension before! Honestly!
Lease extensions – how big is the market?
Many people don’t realise how huge the lease extension market is – but recent figures from the Office of National Statistics should help to make it clear. There are 22.5 million homes in England and Wales of which a fifth are flats. Of these flats, 1.5 million are long leaseholds which are going to require a lease extension at some stage.