Sussex Lease Extensions Blog

Lease Extensions: Getting Started on Extending a Lease

Lease extensions can very rarely be privately agreed with freeholders on reasonable terms, leaseholders often end up paying excessive amounts for poor terms. The best and most cost effective way to obtain a lease extension is along through the correct legal route provided for leaseholders by the 1993 Leasehold Reform, Housing & Urban Development Act and claim a statutory lease extension. This means that the lease extension will be for a set additional 90 years (ie an existing lease with 70 years unexpired will be extended to a new term of 160 years) with no further ground rent payments. There are several things the leaseholder must do when starting an application.

Before getting started with a lease extension check you’re eligible to apply. If you haven’t owned your property for more than two years then you can’t apply for a lease extension – but there are ways around the rule. If you’re in the process of buying a property then the original seller can begin proceedings for you, serving the initial extension Notice before assigning the benefit of the Notice over to you, the buyer.

Find a trusted team of professional advisors in the form of a valuer and solicitor to manage the legal documentation. A valuer will determine how much should be offered to the freeholder in the Notice of lease extension, whilst a solicitor will then prepare and serve a S42 Notice to the freeholder.

The freeholder then has to serve a counter Notice, which typically requested a higher premium payment and it’s then the job of the valuer to negotiate an acceptable premium. In extreme cases, where an agreement isn’t reached after a minimum two month negotiation period, the determination can be referred to the Leasehold Valuation Tribunal (LVT). The LVT will hear both parties’ cases and then determine the premium payment. Other matters such as the rechargeable freeholder’s costs can also be referred to the LVT if these are excessive.

This entry was posted on Wednesday, March 6th, 2013 at 12:15 pm and is filed under Fresh News. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.