Your Lease Extension - 6 Top Tips

Negotiate within the statutory framework

Whilst it is possible to informally negotiate a new lease with your landlord outside of the statutory framework the benefits of the statutory procedure are that there is a prescribed formula for valuing the premium payable to the landlord for granting a new lease.

The new term will be for 90 years plus the remainder of the existing lease term, ground rent will no longer be charged and the landlord is also obliged to proceed with the lease extension.

Instruct experienced, specialist lease extension solicitors

Your lease extension solicitors will serve an Initial Notice on the landlord which will offer a premium for extending the lease. The process of extending a lease has strict time limits once the notice has been served and the Landlord may then serve a counter notice demanding a higher premium, with supporting evidence, or accept the offer made.

Ensure you have finance and lender consent before proceeding

A lease extension may proceed fairly quickly, so have everything you need ready. A Land Registry application will also be needed and this will consequently require formal consent from your lender.

Extend before there are less than 80 years left to run

The general rule is that the shorter the lease the more expensive it is to extend. If your lease is approaching 81 years unexpired you should seriously consider extending it as soon as possible. With a lease with fewer than 80 years, the Landlord is entitled to calculate and charge a higher amount - called the marriage value.

Instruct a specialist Chartered Surveyor to carry out a valuation

They will put a value on the lease extension using the valuation formula in the Leasehold Reform Housing and Urban Development Act 1993. Contact the RICS for a list of local surveyors who specialise in lease extensions and obtain a written quote. Most surveyors will charge a fixed fee to prepare the initial report, eliminating hidden extras and disbursements, which should cover the initial inspection of the property, reading the lease and making all the calculations. If the surveyor is asked to negotiate with the landlord or their agent or any further work is required if the valuation cannot be agreed, further fees will apply. If they act for several flats in the same building they can usually offer substantial discounts.

Avoid agreeing other variations to the lease if possible

Under the Act you are entitled to a further 90 years on your lease with no ground rent payable on the original term or extension, but most are concluded by negotiation. A landlord will commonly try to agree an increase in ground rent, as a condition for extending quickly and without waiting for notices to expire. You still have to pay the service charge for the tribunal. However, such exchanges should be avoided if possible. Leasehold extension is a highly complex area of the law - so make sure that you contact specialist lease extension solicitors to ensure professional legal advice from the outset.

Thinking of a Lease Extension [ ] ? If you are, talk to the specialist Lease Extension Solicitors [ ] at Bonallack & Bishop first.

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