FAQ on Lease Extensions
It is important to extend your lease because as the lease term decreases, the value of your property may decrease and it becomes more difficult to sell or remortgage. Plus, a longer lease term provides greater security and greater flexibility for the property owner.
To be granted a lease extension, you are ordinarily entitled if you have owned the property for at a minimum two years and the lease term has at least 21 years remaining.
You can count on:
- expert advice and support
- fair negotiations
- transparent communication with the freeholder
Multiple factors determine a lease extension’s cost, such as the value of the property, the lease length after extension, any ground rent, and the length of the extension. In addition to this, legal and valuation costs will increase the overall price.
To start, contact a solicitor or leasehold expert for a lease extension, get a lease extension valuation and then serve a Section 42 notice to the freeholder stating the proposed terms.
Extending a lease requires following these steps:
- seeking advice from a leasehold expert or solicitor
- instructing a surveyor to conduct a valuation for extending a lease
- serving a Section 42 notice on the freeholder
- negotiating price and terms of the lease extension
- completing the new lease agreement to be registered with the Land Registry.
If you are not eligible, if you serve an incorrect Section 42 notice, or if within the statutory arrangement period you fail to agree on terms with the freeholder, you can be declined a lease extension.
In the event that the landlord is not found, it is still possible to request a vesting order from the Leasehold Valuation Tribunal (First-tier Tribunal: Property Chamber). This will lead to an extension without the involvement of the landlord.
When a tenant meets the criteria to be able to claim the statutory lease extension, an extra 90 years is added to the length of the existing lease with the rent rate being reduced to a peppercorn (usually zero).
An informal lease extension is what occurs when a tenant who already has a lease agrees with the landlord to extend the lease term without following statutory procedure. This method is more flexible, but can mean additional risk, sometimes unfair terms and possibly an unsuccessful new lease.
The increase in the value of a property when the lease is extended. It is the difference between the value of the property with the existing lease and the property with a longer lease.
The amount of time it takes to extend a lease depends on a variety of factors. In general, it takes between 6 and 12 months, not including any delays caused by negotiations or disputes over the lease extension terms.
The purpose of the “right to manage” is to enable tenants to take over the management of their building from their lessor. Once the right to manage is obtained, those lessees control the running of the building, including maintenance.
In general, a lease with a term of 999 years can not be extended. However, if there is less than 80 years unexpired at the time of the application for a statutory lease extension, the lease can probably be extended under the Leasehold Reform, Housing and Urban Development Act 1993 by an additional term of 90 years.
The premium payable for a lease extension will depend on a range of factors, including the length of your remaining years on the lease, the value of your property, and the terms of the lease extension you are offered. A professional lease extension valuation will ensure you receive an accurate valuation for your premium.
Our panel of London valuers have a great deal of experience in offering professional lease extension valuations and can therefore provide very precise valuations in order to help tenants of leases secure an equitable lease extension.
The process of a lease extension valuation is when a competent and skilled surveyor calculates the expense of extending a leasehold, taking into account aspects like the property’s worth, the quantity of time left on the lease, and any ground rent.
