GET HELP TO SECURE THAT
LEASE EXTENSION

Our residential property lawyers specialise in lease extensions

Blacks Legal strives to provide an expert personal service at a competitive price. Our team of residential property solicitors in Ilford are highly qualified and experienced and can handle all your residential property conveyancing matters, no matter where you reside in the London and Essex areas.

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Leaseholders Q&A

Lease extensions – what’s the fuss?
 
 

A lease is categorised as a diminishing asset. As time goes on, your lease becomes shorter and the value reduces.

What is a lease extension?
 
 

A lease extension extends the term of a lease so that your lease is longer; extending your lease will help to preserve and increase the value of your flat.

Will I get increased security?
 
 

Extending your lease can give you security over where you live as allowing your lease to decrease or expire will return it back to the freeholder. This would mean that you have no lease to either sell or extend in the future.

Will it make my flat easier to sell?
 
 

Extending your lease should make your flat much easier to sell. Most buyers will use a mortgage to fund their purchase and most mortgage lenders do have minimum requirements as to the length of the lease that they will consider providing a mortgage for.

Looking at current property market trends, lenders have become more specific as to the requirements of lease lengths with some not lending on anything less than sixty years. So it is advisable to extend your lease before looking to sell your flat. You'll generally find that not only will it preserve or increase the value but it should make the conveyancing process much simpler for you.

Extending the lease should make your flat much easier to mortgage; lenders have minimum lending requirements and if your lease is of a length shorter than your mortgage company finds acceptable, they will not agree to grant a mortgage over it until that lease is extended.

Any other queries?
 

Don't delay your lease extension

Whether by agreement or by the statutory process, leaseholders should know of the 80-year lease milestone.

As the number of years left on a lease decreases, the value of the property starts to decline sharply. Under the statutory process, the landlord becomes entitled to 50 percent of the ‘marriage value’ of extending the lease as the lease is decreasing down from 80 years.

If you can afford to extend a lease today, we would advise you to go ahead and do it. It only gets more expensive every year you delay.

You will have a problem remortgaging or selling if you have fewer than 80 years remaining on your lease and the statutory formula which calculates how much you should pay will make it increasingly expensive, meaning the freeholder (landlord) can charge effectively what they want.

The more a leaseholder delays extending their lease, the more costly it becomes.

Marriage Value- the marriage value is the increase in the value of the property following the completion of the lease extension, reflecting the additional market value of the longer lease. This potential ‘profit’ only arises as a result of the landlord’s obligation to grant the new lease. The legislation requires that it be shared equally between both parties. The marriage value increases when there are fewer years remaining on the lease because the value of a leasehold property decreases as you get closer to the end of your term.

Are you eligible for a lease extension?

If you fit the criteria below then it is likely that you are.

  1. Residential lease – your lease must be a residential lease, which means that commercial leases cannot be extended
  2. Originally awarded for at least 21 years – the original lease awarded to you must be for no less than 21 years. This is probably the case, but it is definitely worth checking how long your original lease was before you start proceedings to extend it.
  3. 2 years of ownership – you must have owned the lease for a period of at least two years in order to qualify for a lease extension. However, you don't have to live here for all this time, or at all – you just have to be the owner for at least two years.

So, even if you’re a buy to let landlord and own and rent your apartment for two years, you will likely still be eligible.

Property that is not eligible

If your property has been owned for at least two years under a lease originally granted for at least 21 years, the only flats that are NOT eligible for leasehold extensions are those:

  1. Owned by the National Trust
  2. Owned by the Crown
  3. That come under a Shared Ownership property lease, where you do not own 100%
  4. Within Cathedral boundaries

Refusing to grant a lease extension

There are two main ways a landlord can turn down the request for a lease extension

  1. If they believe you are not eligible to apply for such
  2. If they are planning to significantly remodel / modify or demolish the property

Apart from these two, the main areas of potential dispute with your landlord are, in the first place, your eligibility for a lease extension; the need to follow the correct procedure; and any dispute either about the price to be paid for the lease extension or whether or not the landlord costs [which you have to pay as part of the lease extension arrangement] are appropriate.

Missing Freeholder?

When it comes to your lease extension - if you simply cannot track your freeholder - the Leasehold Reform Act 1993 is designed to help. In particular, it provides for the avoidance of the complex, costly and time-consuming process of serving a statutory notice for the extension of a lease where an extension is required but no freeholder is present or locatable.

Where a property has an absent landlord or only has a short term remaining, it will be incredibly unattractive to mortgage lenders and thus difficult to remortgage.

The Leasehold Reform Act 1993 means you are able to do so by applying for a court order.

Other services

With expertise in leasehold matters, Blacks Legal are well equipped to deal with other ancillary property matters including:

  • Lease variations
  • Licence for alterations
  • Disputes to do with service charges

Our experts work with both leaseholders and landlords in order to provide an efficient service to our clients. Contact us today for specialist advice.

Get in touch with us today

Our highly experienced property lawyers will ensure that your matter is dealt with as efficiently as possible, in order to facilitate a smooth process. We aim to help you every step of the way, making sure you're always aware of what's going on with your case and what still needs to be done, without any jargon. Call us today to book an appointment.

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