Category: Residential Property Management

Two routes are available for homeowners interested in obtaining a lease extension premium. This is an informal lease extension or a statutory lease extension. In this blog I will address the typical process for statutory lease extension.

Under all leases, the lessee will be responsible not only for your own surveying and legal expenses in extending the lease, but also your freeholders costs as well.

Statutory Lease Extensions Explained

This is the right under statute for a statutory lease extension, which a 90 year extension to your original remaining term at nil ground rent provided that you are a qualifying lessee. To be a qualifying Lessee you have to meet the following criteria:

• Leasehold Ownership. You have to have owned the leasehold interest for at least 2 years
• Leasehold term. A long lease is, mainly, a lease for a term of years in excess of 21 years from when it was originally granted (this does not apply to the reaming unexpired term, but the original lease length).

Despite fulfilling the criteria, you would not be eligible for a statutory lease extension if:

• Housing Trusts. If the landlord is a charitable housing trust and the flat is provided as part of the charity’s functions.
• Commercial Interests. It is a business or commercial lease.

If these criteria are fulfilled, then the route of a statutory lease extension is available for you.

Leasehold Renewal Process

A typical lease extension process would involve the following:

• Instruct a surveyor to carry out a lease extension valuation on your property, this will normally set out a fair and reasonable premium for a lease extension.
• It will also set out the level in which a section 42 notice should be served upon the landlord. This is a notice that sets out under statute that you are seeking a lease extension valuation. It also sets the valuation date as the date of the notice. This is very important, as more times elapses, the less the unexpired term thus resulting in a more expensive premium.
• The notice cannot be served by the surveyor; however it must be served by a competent solicitor.
• The landlord has a 2 month period to serve a counter notice, section 45 notice, this will either accept the proposed premium or reject the premium in the section 42 notice and state what they believe the premium should be with the lease extension.
• Lease extension’s have a degree of negotiation, as there are a number of variable factors and the lessee is typically looking to acquire the premium for the lowest figure, while the freeholder is seeking the highest possible figure.
• Typically once both notices have been served, each of the surveyors on both sides are instructed by their clients to negotiate the lease extension premium, looking to get the best deal for their party using the facts, the negotiation fees are payable by each of the parties. Unlike the valuations fees which are payable by the Lessee.
• Once the premium is agreed, which typically can be a 4-6 month period, the matter is passed onto the solicitors who will agree the new lease and with the transfer of funds the matter can be completed.
• If the premium is not agreed, in the allotted time period, the lessee can make an application to tribunal; this typically has an associated fee of £500+Vat through the solicitors.
• Each party will have to bear their own costs with professional fees and share the tribunal costs equally.
• The tribunal will consider the case bought forward by each of the surveyors and decided on the premium payable. This can be appealed; however this is a costly exercise.

Residential Lease Extensions in Guildford, Surrey and London

Perry Hill’s residential experts successfully help those looking to extend their residential lease. Our team can provide expert valuation services prior to the lease extension process. We are also happy to assist you in the negotiation stages of the lease extension process. To find out more about our residential lease extension team, get in touch here or call us on 01483 237333.

Residential Lease Extension – Why You Should Extend Your Lease

Property and land registry law can often be extremely complex. If you are considering purchasing a property or already own your property, you may wish to know more about Residential Leasehold Extensions.

A Leasehold Agreement means that you own your property but the land on which your property has been built is owned by the Freeholder. This may not seem ideal, however, as long as the Lease remains valid, then you are entitled to occupy the property.

Often people may purchase a house or flat without realising that the number of years left on the Leasehold is not enough. Though not always a problem at the time, it could cause issues if you needed to suddenly sell the property.

In fact, approximately 60% of mortgage lenders won’t lend on properties with less than 75 years left on the Lease.

This is why considering a Leasehold Extension is an ideal solution for people finding themselves heading towards the end of their Lease.

Lease Extension Advice – How to Negotiate a Lease Extension

At Perry Hill, our expert residential property valuers provide concrete advice to secure the future of not just your bricks & mortar but your home and investments.

Negotiating a Leasehold Extension can sometimes be a difficult process, requiring the professional assistance of property consultants who are able to confidently negotiate Leasehold Extensions.

Our Lease Extension specialists begin the process by providing an up-to-date valuation report of the property, including detailed property surveys and inspections. This provides the foundations from which to begin negotiating the extension of the Leasehold with the Freeholder.

Perry Hill Leasehold negotiation services ensure that the Leasehold Extension is fair and representative of the current market and property valuation.

Extending My Leasehold – When is the Best Time?

Though it may seem like your Leasehold has an adequate number of years left, properties with a residential Lease of 79 years or less can often cause homeowners and their family’s issues in the future.

For example, if family members inherit a property with a 70-year Leasehold, they may struggle to sell the home and be unable to afford the upkeep of the property.

Each residential Leasehold Extension in the UK can vary in price, though extending Leaseholds can be considerably less expensive if approached before the Lease reaches the 79-year expiration mark.

The Cost of Residential Lease Extensions – Are Lease Extensions Worth It?

It’s important to cost-up the potential impact of purchasing a property with a Leasehold of 80 years or less. Financially, you may be able to afford the property with a mortgage but in several years’ time, your circumstances may not allow for a Lease Extension.

Extensions on properties with short Leases (65 years or less) are expensive. In fact, it’s these residential Lease Extensions which can often become extremely complex, making it worthwhile to instruct a professional Leasehold Extension negotiation company to assist you in securing the best price possible for extending your Leasehold. The reason these types of Leaseholds are much more expensive is because below 80 years, your Leasehold extension costs include a 50% ‘marriage value’ fee.

‘Marriage value’ refers to the extra value extending your Leasehold adds to your property.

Can I Extend my Residential Leasehold?

Most of the time houses are sold as Freehold and so it is flat owners that may require residential Leasehold Extension services. Increasingly however, new build houses are being sold with Leasehold agreements leaving residents angry at unexpected rental charges in addition to expensive mortgage payments.

Though most homeowners are able to extend their residential Lease, there are certain legal criteria to be met before doing so.

Most importantly, you must have owned the home for a minimum of 2 years. This can cause additional expenses if the two years you are required to wait means that the unexpired years on the Lease drops below 80.

Professional Leasehold Extensions from Perry Hill

The decision to extend your residential Leasehold is an important one for the future of your home and family. It is recommended to undertake residential Leasehold Extensions with the assistance of qualified professionals to ensure the outcome of the Leasehold Extension Agreement is favourable and fair for both the Leaseholder and the Freeholder.

Perry Hill Chartered Surveyors successfully help homeowners each year in extending their residential Leaseholds. Our industry-recognised surveyors save our Clients time and money by helping with the burden of negotiating complex residential Leasehold negotiations.

Find out more about Lease Extensions and contact a member of our team today to discuss your options.