To qualify for a flat lease extension you must satisfy the following 3 requirements
- the original lease must have been granted for over 21 years,
- the lease should be for residential use and
- you must have owned the flat for a minimum of 2 years. You do not have to have been in occupation during these 2 years of ownership.
Note that general rules on leasehold extensions may not necessarily apply to government or National Trust owned properties.
Got a lease extension question? Call our specialist solicitors on FREEPHONE 0800 1404544 for FREE initial phone advice – with no strings attached. Or click here to read more how to get your lease extension.
How much will extending the lease on my flat cost?
There are a number of different costs involved in any flat lease extension.
- Firstly you will have to pay your freeholder premium – see below
- Secondly you will need to pay legal costs – both for your own solicitor and any solicitor appointed by your freeholder
- Thirdly, if you decide to go ahead with a specialist valuation of your own, you will need to pay the costs of your surveyor – and the reasonable costs incurred by your freeholder in appointing their own specialist surveyor to value the lease extension.
Do I really need a surveyor to value my flat lease extension?
We strongly believe that you do. Your freeholder is almost certain to get a valuation and therefore they will know exactly how much your lease extension will cost. They may well ask for more than the valuation, or at least choose the top premium price on a range of valuation. Unless you have a good idea of what you should be paying, it’s very difficult to know when your freeholder is offering a fair price and when they’re trying to rip you off.
If you do decide to go ahead with a valuation, there are broadly two options. What is known as a desktop valuation is usually cheaper, because it does what it says on the tin. The surveyor will do the calculation from information they can find online – and will not actually visit your flat. This can lead to a less accurate valuation – because the condition and particular circumstances of your flat will affect the premium. A desktop valuation therefore is much better than relying on an online calculator, but will not be as accurate as a proper physical inspection by a specialist surveyor.
Does my surveyor have to be a lease extension specialist?
We should also add that the assessment of the premium is based on a complicated legal formula. In our experience, the vast majority of surveyors, even if they are fully qualified chartered surveyors, struggle with these, calculations, simply because they very rarely come across them. There are however a small number of surveyors nationwide who do this work on a regular basis. We have developed a nationwide unofficial panel of these specialist surveyors who we rely on to get the right price for your lease extension. We are happy to introduce you to 1 of the surveyors and if you prefer, to instruct them on your behalf as part of our one-stop shop service.
So to sum up, not getting a specialist valuation yourself (and one that is based on a physical examination of the flat at that) is risky. Our advice, don’t cut corners, it’s likely to cost you more in the long term.
Click here to read more about the importance of appointing a specialist lease extension surveyor.
My flat lease extension – the first legal steps
If you decide to go down the formal statutory route for a lease extension (which your freeholder cannot refuse) rather than the voluntary or informal route, then the first thing to do is to instruct an experienced leasehold extension solicitor.
Your solicitor will serve the appropriate legal notice on the freeholder informing them that you wish to extend the lease.
The formal process of extending a lease is subject to stringent time scales, so you are best instructing a solicitor as soon as possible. Make sure that the solicitor you appoint as plenty of experience of flat lease extensions, because the vast majority of property in conveyancing solicitors simply don’t come across lease extensions very often.
Our five strong team handle over 350 lease extensions each and every year, and the number is growing. If you’re thinking of instructing another solicitor, make sure there are specialist – ask them how many lease extensions they handle every year.
However you do instruct, make sure that you always ask for a quote for the legal work.
The freeholder – time for a response
The freeholder will have 2 months in which, to reply to your leasehold extension notice.
This is the stage where you need to get your own valuation of the premium you need to pay. When instructing a surveyor, always get a fixed fee for the work. The fee should include an initial inspection of the property, reading the lease agreement documents and doing all relevant calculations.
What is a Counter Notice?
When the freeholder receives your extension notice they will usually serve a counter notice. This will either be ‘friendly’ therefore approving the extension or ‘hostile’ which opposes the extension.
In order for the freeholder to issue a hostile notice he must have a legally valid reason, which are only available on very limited grounds.
If this does occur, your solicitor will advise you further on how to proceed.
The period of negotiation
However, usually the notice will be friendly and after this is received your solicitor will normally enter into negotiations with the freeholder solicitor.
Both parties will negotiate the terms of the extension and the amount of premium to be paid using the information provided by the surveyors appointed by both sides.
What happens if the freeholder simply doesn’t respond to my application?
If the freeholder refuses to respond to your notice, then you are also entitled to take the request for a lease extension before the County Court.
An lease extension completed in this way is usually awarded on the same terms as the original lease. Therefore this is not ideal if you want to renegotiate the leasehold terms, but you will normally find that the County Court will accept a lower premium than might have been expected from a commercially minded freeholder.
What happens in the case of a dispute with my freeholder?
When it comes to lease extensions, it is possible to apply to the First Tier Property Tribunal to resolve disagreements about any of the following:
1. The correct level of your lease extension premium
2. Whether or not the legal and surveyors’ costs claimed by your freeholder is reasonable.
Finalising your flat lease extension
Once the freeholder receives your notice, you will be responsible for all of the costs associated with the extension i.e. the valuation fee and legal costs. The notice will also set a date for the extension.
If you are extending your lease using the formal or statutory route, then you are entitled to a full 90-year extension to the length of your current lease. paying no ground rent. You will still be responsible for any service charges as agreed under the original lease.
The main benefit of looking to extend your lease is the increase in value that it will bring to your property.
Because of the reluctance of many major lenders to offer mortgages on short lease flats [click here for a roundup of mortgage availability for short leases], short leases can be hard to sell. So if you extend for a further 90 years your flat becomes much more appealing to a purchaser.