InsightsResource - Property and Conveyancing - POSTED: March 23 2017
Extending your lease
In the current market conditions, you should consider the benefit of exercising your statutory rights to extend the Lease of your flat under the Leasehold Reform Housing and Urban Development Act 1993.
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What are the benefits of extending my lease?
- It will make your property more marketable.
- You will protect your property from loss of value due to a declining lease term.
- You will no longer have to pay ground rent.
Can I extend my lease?
If you are the owner of a long lease of a flat and have owned the flat for two years you are a qualifying tenant under the legislation.
What do I qualify for?
A 90 year extension to the unexpired term of your current lease at a peppercorn rent (i.e. no ground rent). Other payments under the lease such as service charge are unaffected.
How do I extend my lease?
The procedure is governed by the legislation and you should note the following:
- You should obtain a valuation from a specialist valuer as to the price to be paid.
- A Claim Notice is then prepared and served on the Freeholder.
- The Freeholder has to be a given a period of at least two months within which to respond and serve a Counter-Notice.
- Negotiations then take place usually regarding the price. If agreement is reached, the lease extension is then prepared. If there is no agreement then an application can be made to the Leasehold Valuation Tribunal to determine the price payable.
- Be warned – there are strict time limits which need to be observed throughout the process. Failure to observe the time limits can mean that your claim will fail and you would have to wait another year before making a new claim.
Important information for flat owners
The value of your flat is affected by the number of years the lease has left to run.
As the length of your lease diminishes your property will become less appealing to purchasers and the amount you will have to pay to the freeholder for a lease extension will increase.
Legislation gives flat owners the right to extend their leases or collectively purchase their freehold. Collectively purchasing the freehold will provide you with the control in the running and maintenance of the building.
Exercising your right now can prove a wise investment and make your property more marketable.
We have a specialist dedicated to assisting leaseholders in extending their lease or in acquiring the freehold. For expert advice and free information sheet, contact Kate Hawken on 01622 776406 or email firstname.lastname@example.org.
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