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The lease duration has very real implications for both the value of your property and your enjoyment of it. A longer lease provides security. It is easier to sell a property with a long lease, and it is easier to secure a mortgage on the property when the lease is long.
To gain a lease extension, you are mostly entitled if you have owned the property for at least two years and if the lease has at least 21 years remaining in it.
You can expect:
Numerous factors set the cost of a lease extension: the property's value, ground rent, the length of the lease after extension, and the legal and valuation costs also inevitably add to the price.
First, approach a solicitor or leasehold expert about extending the lease. Second, obtain a lease extension valuation. Third, serve a Section 42 notice on the freeholder that states the terms you propose.
The lease renewal process involves several steps and a bit of expertise.
First, it's advisable to consult with a leasehold expert or solicitor. Their guidance will ensure you understand the complex nature of the lease renewal process.
You also will need to use the services of a surveyor. Your surveyor will value your current lease and then will value the lease extension.
You will also serve a notice to your freeholder, called a Section 42 notice, which tells your freeholder you are seeking to extend your lease. That notice serves very important legal purposes.
After that, if you and your freeholder can negotiate a reasonable price and some terms that don't completely tie you up in knots, you'll get a brand-new lease, which you can then register at the Land Registry.
Yes, it can, and there are several reasons why it might be refused. You can be refused for essentially failing to meet the eligibility conditions, serving an incorrect Section 42 notice, or not reaching an agreement on terms with your freeholder during the statutory period.
If the landlord is unaccounted for, one can still apply to the Leasehold Valuation Tribunal (First-tier Tribunal: Property Chamber) for a vesting order. This order will allow the tenant to obtain a lease extension without the landlord's consent.
When a tenant qualifies to obtain the statutory lease extension, they receive an additional 90 years to the existing lease term that runs in parallel to the unexpired term of the existing lease, with the ground rent reduced to a nominal sum (usually zero).
An informal lease extension is what happens when a tenant with a current lease agrees with the landlord to continue the lease past its current end-date without following the formal process set out under statutory law. This method is riskier for the tenant and also comes with the possibility of imprecise or unfortunate terms and a failed new lease.
A lease extension valuation is performed by a qualified surveyor. He or she estimates the cost of extending a lease. To produce this number, the surveyor considers several things: how much the property is worth, how much time is left on the lease (in years), and how much ground rent is being paid.
"Marriage value" refers to the increase in a property's worth when the lease is prolonged. It is the disparity between the value of the property based on the current lease and the improved value of the property with a new, longer-term lease.
A lease extension takes anywhere from 6 to 12 months on average. However, it can take less or more time, depending on various factors. The extension can take considerably longer if there are complex back-and-forth negotiations.
The "right to manage" makes it possible for tenants to take over the management of their building from their landlord. When the right to manage is granted, the tenants run the building and whatever upkeep is necessary to keep it habitable.
In most situations, a 999-year lease can not be extended. When the unexpired portion of the lease is less than 80 years, the British statutory leasehold extension process can add 90 years to the term of the lease. The underlying logic of this structure seems to be that even with the longer term of 999 years the leaseholder lacks actual ownership of the leased premises.
The cost will depend on several things. First, how long do you have left on the lease? Second, what is the current value of your property? Third, what are the terms of the lease extension? To determine the cost accurately, we would suggest you hire a qualified professional to do a valuation.
Our panel of valuers in Notting Hill has a great deal of experience in conducting such valuation work and can therefore provide very accurate and, in essence, necessary valuation figures to help leaseholders obtain a fair lease extension.
Looking for a Chartered Surveyor? If you are buying a property, contact us for a building survey. Our panel of CIOB, RPSA and RICS surveyors will help you with the Level 2 or Level 3 property survey you need in Notting Hill. We can also assist you in Red Book Valuations, Party Wall Awards and other services. Reach out to us today for building surveyors, valuers and party wall surveyors in London!
