Leaseholders can get an extension if they qualify for the legal right to do so. The legislation of the Leasehold Reform Act (1993) governs these criteria and enables an extension of up to 90 years.
The leaseholder should initially have the flat on what is termed as a long lease. That means it must have been granted for at least 21 years. He or she must have owned it for at least two years. The word "owned" is very important as they need not have necessarily lived there.
This two year ownership period can be circumvented if someone buys a flat. The buyer can use the seller's ownership period, and if this takes him over the two years he has a right to a leasehold extension.
In certain cases it is possible to gain a lease extension if the flat is on a short lease - one that is less than 21 years. In such cases the lease would have to have a clause granting the leaseholder the right to what is known as "perpetual lease renewal." This would have had to be agreed at the outset when the lease was first taken. Indeed, it would have had to have been made explicit, especially if there is a dispute with landlord when it comes to trying to extend a short lease.
Another way to secure a leasehold extension on a short lease is if there was a "Prince of Wales" clause in the original agreement. Like the "perpetual lease renewal" this should have been made implicit at the outset. With a Prince of Wales clause the lease would be terminable upon marriage, death or at an unknown date.
Even though the leaseholder may have the right - written into law - to extend the lease, difficulties may still arise. One of these difficulties could be the premium demanded by the freeholder. Even though the person holding the current lease can take the landlord to a Leasehold Valuation Tribunal with the aim of seeing the premium reduced to the market rate, this will only slow things down. And this can be a problem if the lease extension is being sought prior to the flat being sold with a buyer already having been found.
One final, but important, point - it is always critical to seek the services of specialist lease extension solicitors. Most solicitors rarely, if ever come across leasehold extensions - so getting the right one is really important. The right lease extension solicitor will be able to negotiate with the landlord from the outset and should be able to secure a swifter and more satisfactory resolution.
If you are considering getting a Leasehold Extension then speak to Bonallack & Bishop. If you want more information then contact one of their lease extension solicitors today. Senior Partner Tim Bishop is responsible for all major strategic decisions.
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