To get an extension on their lease, the leaseholder must be 'qualifying'.
The original lease must have been for a residential property and should have been granted for a period of no less than 21 years. The person seeking the lease extension should have owned the flat for a minimum of two years. Ownership is the key-word here as he or she will not necessarily have had to have lived in the place.
The cost of the lease extension will be determined by several factors. One of these factors is the ground rent being paid, the period remaining on the current lease and the freeholder's reversionary interest. The latter is the difference value to the freeholder of the current lease and that of the proposed lease.
If the current lease has less than 80 years to run the freeholder is also entitled to a "marriage value" if the lease is extended. The marriage value is the difference between the current value of the property and what is likely to be at the end of the new lease. The percentage he receives is set by law and stands at 50 per cent.
One way in which the leaseholder can avoid this extra cost is to try and extend the lease before it has less than 80 years to run. So it is important to discover when the current lease started, and when it is due to finish.
When set to go through the process of extending your lease, it is advisable to seek the help and assistance of specialist lease extension solicitors. Not only will these solicitor be aware of the law surrounding leasehold extensions and be able to give sound professional advice, they will be able help with the process from start to finish.
A crucial part of the process is the negotiations with freeholder. Many freeholders will try and gain as much financial compensation as possible before agreeing to the lease being extended. The leaseholder will, quite naturally, try and keep costs down. While there is nothing to stop the leaseholder representing himself in the negotiations, this is best left to specialist lease extension solicitors. They will be able to help you through the procedural minefield involved in any leasehold extension - and will be well aware of tricks some unscrupulous landlords use to increase the price - e.g. appearing to agree to a voluntary lease extension when actually all they doing is delaying a tenant making a formal application until there are less than 80 years to run on the lease - when the marriage value can be added to the price of any leasehold extension.
Lease extension solicitors will know how to deal with a difficult freeholder during the negotiations. If negotiations go ahead really smoothly, it is even possible that the lease could be extended in a short a period as two months -though any sensible tenant will expect it to take longer.
Are you thinking of applying for a Leasehold Extension? Get in touch with one of the specialist Lease Extension Solicitors at Bonallack & Bishop today.
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