These are frequently asked questions
about lease extension, and the process to extend a lease:
Lease Extension - How long a lease extension will I get?
Under the terms of the 1993 Act, you
will get another 90 years added on to the existing balance of your
lease. The entire time will be ground rent-free (technically
Lease Extension - What Are The Additional Costs?
Under the terms of the 1993 Act, you
are responsible for the freeholder’s reasonable valuation and legal
In some cases, especially where there
have already been some other leases extended in the same building, the
freeholder may not require a valuation or solicitor to validate the
Claim, which is good for the leaseholder. More typically the procedure
goes like this: When the freeholder receives a S42 Claim they will
pass it to their solicitors to have the validity checked and usually
ask the lessees representative to deduce Title. Then the freeholder
will order a valuation survey and a S45 counter notice will be issued
by their solicitors. Subsequent negotiations usually involve the
freeholder’s surveyor, and if a premium is agreed, the freeholder’s
solicitors issue a new lease or deed of variation.
If a premium cannot be agreed, either
party can request an LVT decision. Usually each party pays their own
costs relating to the LVT. However some leases allow the freeholder to
charge all legal fees back to the leaseholder. In this case you can
ask the LVT to consider this claim under Section 20c of the Landlord
and Tenant Act 1985, so the freeholder will be required to pay their
own expenses and not claim them back.
So you can see it is difficult to give
an exact cost for legal and valuation fees, but as an approximate
guideline allow £1-2000 with no LVT involvement.
Lease Extension – How long does the lease extension process take?
If you are looking to sell your flat
and want to quickly extend your lease through a formal Claim under the
1993 Leasehold Reform, Housing and Urban Development Act, you will be
disappointed – the process is neither quick or easy. The good news is
that you can start the formal Claim process and then assign your
rights to the buyer – who then does not have to wait for the 2-year
ownership qualification period.
You would think that if you were
offering the freeholder a large sum of money, they would move quickly
to say ‘yes’, but for some reason the typical
response time is glacial. Each stage often approaches the prescribed
maximum. For example the initial S42 Claim has a period of 2 months
before any counter notice, and most freeholders reply at the end of
that period. Even when you have completed negotiations and agreed the
final premium, the freeholder’s solicitors often move slowly in
issuing a new lease. Overall the process can take from 4 to 18 months.
If LVT intervention is required, add an extra few months.
Lease Extension – Leasehold Valuation Tribunal (LVT)
A frequent concern is “what happens if
we cannot agree on a price for the lease premium – will I need to go
to the LVT for resolution?”
A lot depends on the stance of the
participants. Firstly, a majority of premiums are agreed by
negotiation. Most freeholders are reasonable, and although they
attempt to get the best price, a fair settlement is the most common
However in a minority of cases, the
freeholder know the concerns that many people will have in relation to
the LVT, as the cost and overhead of preparing a case at the LVT is
considerable. In this case they refuse to negotiate in the hope that
the leaseholder will just pay up to avoid LVT action.
In reality, for most lease premiums,
it is not worth either party proceeding to a LVT, as both parties are
responsible for their own costs relating to a LVT hearing. So
brinkmanship comes into play, and most cases that look like they are
proceeding to the LVT are settled at the 11th hour.
Extension - How do I get a new Lease?
of the process, after the premium has been agreed, the landlord's
solicitors will prepare a new lease. This may be a short lease with
the new terms, referencing the original lease, or a deed of variation
covering the altered clauses. In addition due to recent changes in the
Land Registry requirements, an additional document of prescribed
clauses will also be provided.
Call us today on
020 8629 1066 or
click here for no-obligation advice on how to increase the value of your flat.
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