If you are thinking about a lease extension, there are three criteria which you have to satisfy. If you cannot tick each one of the three boxes, you will not be able to extend your lease. It’s therefore very important to understand the rules about eligibility before you start the legal process.
The criteria for being eligible to extend your lease are:
1. Your lease is residential, not commercial. Leases on commercial property can’t be extended, so you can only extend your lease if you are living in a residential leasehold property.
2. The original lease was for more than 21 years. This kind of lease is commonly referred to as long leasehold. If your lease was originally granted for less than 21 years, then you simply don’t have the legal right to extend it. Unless you’re a weekly or monthly tenant, renting rather than owning a lease, it is very unlikely that your lease was granted for such a short period – but when you are thinking about extending your lease you should double check to make absolutely sure.
3. You must have owned the lease for at least 2 years. In order to extend your lease, you don’t need to have lived in the property for 2 years, but you must have owned the lease. This means that if you own a leasehold property and rent it out, you are still eligible to extend the lease even if you have never actually lived in it yourself.
There are a few exceptions to this 2 year ownership rule – so, for example, if you’re buying a flat, then, provided that the seller has owned that flat for at least two years themselves, they can apply for lease extension and then assign the benefit of that application to you on completion of the sale of the flat – so you don’t need to wait two years, but can crack on with extending your lease as soon as you buy the property. A similar exemption works for probate – if the deceased person owned the property for two years, and the property has been left to you as part of their estate, then again, subject to certain restrictions, you can broadly apply for a lease extension without having to wait for the two-year ownership period to expire.
Properties which are not eligible for lease extension
If one or more of the above criteria does not apply, then your property will be automatically barred from leasehold extension. Apart from the criteria discussed above, there are some other rare cases when a leasehold extension cannot be granted. These are:
1. Properties which are within the boundaries of a Cathedral.
2. When the freehold is owned by the National Trust.
3. The property concerned is owned by the Crown.
4. The property is owned on a shared-ownership basis , e.g. jointly owning a flat with a housing association. You can only apply to extend the lease when you take full ownership of the property.
My Freeholder is refusing to extend my lease
Legally, a freeholder can only refuse to allow you to extend your lease if one of the two following circumstances apply:
• They are planning to demolish the property in the near future
• They have improved act you are not eligible to apply to extend the lease [see above].
There are however other factors which can cause disputes or delays between the leaseholder and the freeholder. This can include arguments about whether or not the proper process has been followed, and whether or not your landlord’s legal fees are felt to be reasonable. The leaseholder is liable to pay the freeholder’s reasonable legal fees as part of the process, and this can some cause problems.
It is important to remember however that the and procedure in leasehold extension is complicated. That’s why it’s crucial that you have the services of an specialist lease extension solicitor with plenty of experience in extending leases who can guide you past the pitfalls.
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