Grant Saw Solicitors are specialists in lease extension matters and we help flat owners protect the value of their properties by extending their leases. We also assist landlords with lease extensions.
Whether a statutory lease extension, a voluntary lease extension or a share of freehold lease extension is required, our experienced team provides clear, practical advice and professional representation.
Benefits of extending your lease
Extending your lease can:
- Protect property value – flats with longer leases are easier to sell and re-mortgage.
- Reduce financial impact – acting before your lease drops below 80 years avoids high “marriage value” premiums.
- Assist mortgage approval – many mainstream lender require the lease to have not less than 85 years left to run.
Who is entitled to a lease extension?
Statutory lease extension
Under the Leasehold Reform, Housing and Urban Development Act 1993, a leaseholder of a flat is entitled to a lease for a term equivalent to the unexpired term of the existing lease plus 90 years (effectively a 90 year extension).
There is no longer a requirement for the leaseholder to have owned the flat for at least 2 years.
The ground rent payable under extended lease is one peppercorn per year, which in practice means no ground rent is payable.
A premium must be paid to the landlord for the lease extension.
Statutory lease extension process
The claim for a statutory lease extension involves following a statutory procedure.
The procedure formally starts with the leaseholder’s solicitors giving a notice of claim (section 42 notice) to the landlord setting out the leaseholder’s proposals for the lease extension, including the premium to be paid and the provisions of the lease.
The landlord must serve a counter-notice in response, setting out the landlord’s counter-proposals.
If all the terms cannot be agreed between the parties soon enough then an application to determine these can be made to the First-tier Tribunal.
Once the premium and the provisions of the lease are eventually agreed, or determined by the First-tier Tribunal, the lease extension is completed and then registered at the Land Registry.
It normally takes about 6 to 12 months to complete a statutory lease extension.
Voluntary lease extension
It is sometimes possible to agree a lease extension without the leaseholder taking the statutory lease extension route (a voluntary lease extension).
Neither the landlord nor the leaseholder is obliged to proceed with a voluntary lease extension. The term of the extended lease, the premium and the other provisions of the lease are not prescribed and it is not possible to have outstanding points determined by the First-tier Tribunal. Therefore, if an agreement is to be reached then what is agreed depends on what is negotiated between the landlord and the leaseholder.
The timeframe for completing a voluntary lease extension will depend on how the negotiations between the landlord and the leaseholder. If terms are agreed in principle (which is not guaranteed) it normally then takes approximately 6 to 8 weeks complete the voluntary lease extension.
Share of freehold
If leaseholders own share of the freehold or own the company which holds the freehold, their leases still exist and the length of the leases is still important.
Leaseholders in this position can agree to extend their leases. Usually the term is 999 years with no ground rent and often no premium is payable.
Premium
When a premium is payable for a lease extension this based on a number of factors, including the value of the flat, remaining lease term and the ground rent.
If less than 80 years remain, the calculation of the premium includes marriage value, which can increase the premium substantially.
A valuation of the premium from a surveyor who specialises in lease extension valuations is recommended so that you have guidance on the premium to be paid.
Timing of completion or serving a notice of claim
When the unexpired term of the lease is 80 years or less, the premium can increase significantly since marriage value is then included in the calculation of the premium.
If the unexpired term has not yet reached 80 years it is therefore important that before 80 years is reached the notice of claim is served for a statutory lease extension, or that the lease is completed in relation to a voluntary lease extension.
Landlord’s costs
In statutory lease extensions the leaseholder must pay some of the landlord’s reasonable legal costs and pay the landlord’s surveyor’s reasonable valuation costs.
In voluntary lease extensions, whether the leaseholder must pay the landlord’s costs is a matter of negotiation, but usually it is agreed that the leaseholder must pay the landlord’s legal costs and the landlord’s surveyor’s valuation costs.
Law Reform
There is proposed law reform concerning lease extensions. Please see our comments on this by clicking here.
Why choose Grant Saw Solicitors?
Our lease extension solicitors specialise in:
- Statutory lease extensions
- Voluntary lease extensions
- Share of freehold lease extensions
- Applications to the First-tier Tribunal.
We also specialise in freehold purchases and right to manage claims
We have a proven track record of successful outcomes, providing clear guidance throughout the lease extension process.
Contact our lease extension team
We deal with lease extensions in London, the South East and all over England. To discuss your lease extension with a lease extension lawyer, contact Grant Saw Solicitors today. For more information, please email us or contact us on 020 8858 6971.
