Lease Extension – Key Terms And Numbers

It pays to know what you are doing when you are extending a lease as an understanding of the process will help you get things done as efficiently and quickly as possible. This guide takes you through some of the key facts and figures involved in lease extension so you will have a better understanding of what you are dealing with when it comes to putting everything into motion.

1993 Leasehold Reform Act
This is the Act of Parliament that gives tenants the right to a lease extension. Its full title is the Leasehold Reform, Housing and Urban Development Act 1993 (as amended). This is what sets down the process you are required to follow when extending a lease, so it is worth getting to grips with it.

21
This is the number of unexpired years that must have been left on your original lease if you are going to be eligible for a leasehold extension.

2
This is the number of years you need to have owned your property before you are eligible to extend the lease. However, the only criterion is that you own the property – you don’t necessarily have to have lived there.

80
If you have less than 80 years left on your lease when you start the process of extending your leasehold, you will have to pay an additional cost known as the ‘marriage value’. This increases the costs of lease extensions, so if possible you should definitely start the process as early as you can – before you pass that 80 year deadline.

90
This is the number of years you are able to extend your lease for under the 1993 Act. The number of years left on your original lease is added to this, so if you had a lease for 93 years and you extended it by 90 years, your new lease would be for 183 years.

Peppercorn rent
When you have extended your lease, you will be charged a peppercorn rent on it. This basically means that your ground rent on the new lease is negligible and it is one of the reasons people take the decision to extend their lease in the first place.

First-Tier Property Tribunal
If you are unable to come to agreement with your landlord over how much extending your lease should cost, you will need to ask your solicitor to refer the case to First-Tier Property Tribunal (previously known as the leasehold valuation tribunal). This is where the case will be debated and settled.

In need of a specialist Lease Extension Law Firm?

Making sure the law firm you appoint to manage your lease extension really understands lease extension is critical. Very few solicitors deal with lease extensions regularly – we have a three strong team dedicated to nothing but lease extension, collective enfranchisement and right to manage company formation.Wherever you are in the UK, for a FREE initial telephone consultation on extending the lease on a flat, either ;

  • call our Solicitors today on 0800 1404544
  • or email us using our contact form for FREE initial advice and a FREE quote or we can arrange to ring you back

    Collective Enfranchisement – The Pros And Con

    SOLICITORS SPECIALISING IN FREEHOLD PURCHASECollective Enfranchisement lawyers. Image of block of flats

    Collective Enfranchisement –  the Pros:

    Generally, buying the freehold [also known or leasehold or collective enfranchisement] of a residential building collectively delivers the best result for tenants – because it results in full ownership and control of the building.

    Tenants who acquire the freehold can grant 999 year leases and also take over the management of the building. Although tenants now have a statutory right to take over the management of the building they tend to prefer a collective claim because, as stated above, it also gives them the right to grant long leases to themselves at no extra premium, significantly enhancing the value of their flat.

    Collective Enfranchisement –  the Cons:

    When buying the freehold, leaseholders should be aware that taking over the management of a large block can be onerous. Even though day-to-day management matters can be contracted out to managing agents, as freeholders, the tenants are responsible for insurance, repairs, redecoration and such issues. Pursuing neighbours for arrears of service charges or ground rent, or dealing with complaints about unauthorised alterations or noise nuisance is not an easy task.

    The cost of buying the freehold involved in lease enfranchisement could also be high if there are a number of short leases and few participating tenants.

    The collective claim

    The freehold purchase of a building as a group of tenants is a complex project that requires much organisation and should not be entered into lightly. It is important to form a coherent group headed up by a few enthusiastic residents who can build consensus amongst the participants, and sustain momentum over a long period of time.

    Once this group has been formed, it is strongly advisable to instruct a solicitor to implement the technical procedure required and an enfranchisement surveyor to advise on the likely freehold value. These professionals will wish to deal only with the residents appointed representatives, who can maintain a line of communication with their fellow residents.

    And with medium or larger blocks, it’s well worth considering a participation agreement. A participation agreement is a binding legal contract that locks in all of those leaseholders who have agreed to join the collective enfranchisement process.

    Our team regularly draft these legal agreements – click here to read more about participation agreements

    Looking for Specialist Collective Enfranchisement Lawyers? Contact us today

    Wherever you live in the UK, for FREE initial advice and a FREE Collective Enfranchisement quote

    • Call us on (01722) 422300 or

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