Lease extensions can seem tricky at first glance. This brief guide will equip you with a basic knowledge of the process, where to start, and help you figure out what questions to be asking along the way.
YOU HAVE A RIGHT TO A LEASE EXTENSION
If you have owned your flat for more than 2 years, you are legally entitled to a lease extension of 90 additional years (that is, 90 years on top of what you have left now), with a peppercorn ground rent. This means that the freeholder is obliged to grant you this lease extension. The only matter to be agreed is how much you pay.
A PROCESS OF NEGOTIATION
There is a ‘statutory calculation’ set out in the law as to how a lease extension should be valued. The calculation is, however, subject to a number of variables. This is what makes it a process of negotiation. The leaseholder makes an offer to the freeholder at a lower level, the freeholder comes back with a higher counter-offer, and then the two parties negotiate towards each other until an agreement is reached.
STEP 1: VALUATION
How do you know how much a lease extension will cost? Or, how much to offer? That’s where we come in.
We can undertake one of our comprehensive, professional valuation services; providing bespoke, expert advice and giving you a valuation to accompany your offer to the freeholder, as well as a valuation for what we think you will ultimately pay, post-negotiation stage.
Click here to see which one of our valuation reports best suit your needs.
STEP 2: MAKING AN OFFER
Once you have read our report, you will be in a well-informed position to enter into negotiations with the freeholder. Making an offer can be done in one of two ways:
1. Formally, by instructing a solicitor to serve a Section 42 Notice of Claim – which claims your right to a 90-year lease extension at a peppercorn ground rent, and states the proposed premium. The freeholder is then legally obliged to respond by way of Counter Notice, and has a set time frame within which they must do so.
2. Informally, by way of written correspondence. Outside of the provisions of the relevant Act, you and your freeholder are free to come to whatever agreement you like, and you can make a written offer for the equivalent of a statutory lease extension (i.e. 90 additional years without a ground rent), or you can propose different terms. These types of negotiations should always be entered into having taken professional advice, and with caution.
STEP 3: NEGOTIATION
Once a counter-offer has been made, either by way of Counter Notice or return correspondence, the negotiations commence.
myleasehold provides professional negotiation services, drawing on our extensive experience and tactical valuation expertise to obtain the best deal possible for your lease extension.
STEP 4: PREMIUM AGREED, LEASE EXTENDED
Once a premium has been agreed, the new lease will be granted through yours & the freeholder’s solicitors, barring any additional lease term negotiations.
Call us today to speak with one of our advisers about your particular situation; or fill out the contact or callback form to the right, and someone will get back to you shortly.
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