|Extend Your Lease With No Ground Rent
|Leasehold Reform Housing and Urban Development
Act 1993 (as amended)
Many Lessees are unaware of their rights to extend the term
of the Lease for a minimum period of 90 years in addition to
the term that is already in existence. The additional 90 years
on top of the present term is at a peppercorn rent (i.e., nil).
We can assist with regard to such advice. We can arrange for
the appropriate valuations as to the cost of such extension
and to assist in the service of such notices and final completion
of the extended Lease.
A large number of Landlords try and negotiate different terms to the statutory ones in order to retain or increase the ground rent. This will enable them to protect the value of the freehold, in case an application for enfranchisement is made in the future..
We can assist with these negotiations if required to ensure the Landlord does not attempt to charge too high a premium.
In more and more cases a sale of a lease is delayed due to the term of the Lease having reduced to an unacceptable period. These points need to be considered before marketing the property.
Lessees needs to own a flat for two years before being able to apply under the act. However it is possible if you are a purchaser to persuade the Seller, provided they have owned the property for two years, to serve the statutory notice and assign the benefit to the buyer, to take advantage of their period of ownership.
Points to consider before buying or selling:-
These are a few questions to be considered before proceeding with a purchase or serving a notice under the Act.
- Has the Lease more than 80 years to go?
- How long has the existing Leaseholder owned the property?
- Is there already a share of the freehold available to enable an extension to be given without cost?
- Will the Lease go below 80 years within 2 years of purchase? In such cases an assignment of a notice by seller needs to be considered.
- Do any other clauses need to be changed in the Lease, in addition to the extended Term, for example out of date insurance clauses or insufficient rights for Lessees or Landlords obligations?
- Is there a Mortgage on the property? This would require a Deed of Substituted Security from the Lender.
- Are the figures for an extension or variation put forward by the Landlords or their Agent reasonable?
- Costs need to be considered as the Landlords costs and surveyors fees will usually be paid by the Lessees.
- If an application has to be made to the Tribunal for an extension. How long could this take and how much could it cost?