Lease Extension – How Executors Can Make the Most of Their Property Rights

Many executors are unaware of their rights to extend a leasehold on a residential flat or house, and the useful benefits this can bring. If leasehold residential property forms part of the estate in question, then, as long as the executor acts to start the application to extend the lease by serving the formal notice of claim within two years of probate being granted, they have the same rights as the living homeowner may have had. The deceased person has to have qualified for the lease extension themselves, which usually means having owned the property concerned for at least two years.

Looking for Specialist Lease Extension Advice? Call our Solicitors on FREEPHONE 0800 1404544 for FREE Initial Phone Advice

Options open to an executor

If these conditions are met, the executor has two options. They can either go straight ahead and extend the lease [possibly by making the most of using some of the cash in the estate to pay the freeholder’s premium, surveyors fees and both sets of legal costs], or start the process with the aim of putting the property on the market.

As long as the executor has started the process of lease extension, this can then be handed onto the person who buys the house or flat. The new purchaser therefore doesn’t have to wait for the two years needed for him to start the lease extension and saves money too.

A property which already has a lease extension underway is worth more than one which does not, and it is more appealing to home buyers too.

Thinking of a Leasehold Extension? Contact our Experts

Here at Bonallack and Bishop, we have a team of specialists in both Leasehold Enfranchisement and Lease Extension – that’s all they do and  they can represent you wherever you live in England and Wales – so for  FREE initial phone advice just

  • call our specialists on 0800 1404544 for FREE initial advice or
  • fill in the enquiry form below

Retirement after 32 years for our leasehold extension expert

Lease extension specialist retires

2014 has seen the beginning of a new era for us – one without Mary Hunt, the longest serving member of our specialist leasehold enfranchisement and lease extension team.

Mary originally joined Salisbury law firm, Pye-Smiths back in January 1981, and has remained with the firm ever since, transferring across to us here at Bonallack and Bishop when the two firms merged in 2005.

Mary has now finally retired, after just under 32 years unbroken service.

Tim Bishop, Bonallack and Bishop’s senior partner, commented “Mary has been such an essential member of our team for so many years, that it will be really strange being without her. Over the years she’s built up an incredible knowledge of lease extension of our clients and it’s not going to be easy to replace Mary. She’s been an incredibly loyal servant of the firm with an exceptional level of cover and to us and our major freehold property client. On a personal note, I will really miss Mary, and I know our practice director will miss her rock cakes! However, knowing Mary, I’m sure she will keep really busy, in retirement, with plenty more time to spend fishing”.

However, Tim continued,” since we are looking to double our lease extension work in the next couple of years, you never know, we may be all to tempt Mary back part-time at some stage – though I have to admit my attempt to sign her up to a further 32 year fixed contract was sadly unsuccessful!”

Lease extension– contact our specialists now

If you are considering collective enfranchisement of your block, or extending your lease, we have or the expertise you need. So, for FREE specialist initial phone advice:

• Call 0800 1404544 for FREE initial advice, or

• Send us an email via the contact form below

Buying the freehold or extending the lease on my house – FAQ

Extending the lease on my leasehold house or buying the freehold? Which is best

You can extend the lease on a house – however you are likely to be better off buying the freehold. This is generally referred to as leasehold, collective or freehold enfranchisement’.

Looking for Specialist Lease Extension or Freehold Purchase Advice? Call us on FREEPHONE 0800 1404544 for FREE Initial Phone Advice.

When it comes to extending the lease on a house, a different process applies to lease extension for flats and apartments. House leaseholders can generally extend their lease for up to 50 years after having owned the flat for 2 years, whereas flat owners can extend by 90 years. Extending a lease also means that you have to follow a strict procedure with your freeholder and will need to pay expensive legal fees (unless you are able to informally agree to lease extension with the freeholder).

The flat lease extension rules and procedures will apply if your lease only covers part of a converted house.

When can I buy the freehold?

Once you have owned the house for 2 years you will be able to purchase the freehold. You cannot do so before this 2 year period has elapsed.

Where can I find out who owns the freehold?

If you are struggling to find your freeholder, you should get in touch with the Land Registry which will be able to find the registered freeholder in their records.

Why buy the freehold of my house?

Buying your freehold is often a better option than extending your lease because of the control it gives you. If you own the freehold you will not need to pay ground rent or service charges and will be able to carry our repairs as and when you wish. Furthermore, it is likely to add value to your home and will make it more attractive to prospective buyers. You may find however that you are not entitled to buy the freehold or perhaps cannot afford to do so.

How do I buy the freehold?

Provided that you qualify, you are legally entitled to buy the freehold. You must follow the process and adhere to the deadlines set out in the Leasehold Reform Act 1967. Taking this route allows the First-Tier Property Tribunal (previously known as the Leasehold Valuation Tribunal or LVT) set the terms for the purchase and the price. It may also be possible to informally negotiate with the freeholder to complete the sale. Taking this informal route means that the Tribunal will not give their input and you technically will not have a right to buy the freehold, leaving it to the freeholders discretion. A county court may be able to step in to enforce it though.

Is buying the freehold expensive?

Whereas flat owners need to pay the freeholder a fee in order to extend the lease, house owners do not need to do so. However, you will have to cover the legal fees of both you and your freeholder. This can be expensive but is generally less expensive than buying the freehold.
Click here to read more about Buying the Freehold of Your House

Can I extend the lease on my house?

It is likely that you will be able to extend the lease on your house provided that you have owned the house for 2 years. You need not have lived in the house for this time however you may not be able to extend the lease if:

• You have previously extended the lease

• You already hold a lease for a business

• The freeholder it a trust for charitable accommodation

• The original lease was awarded for under 21 years or you have sublet the property on a lease under this time

• The original lease has ended

Although you may not be able to extend your lease, you will generally be able to buy the freehold.

What happens if my lease ends?

You cease to own your home once your lease so whilst you may be able to negotiate a lease extension with the freeholder, there will be no certainty. If the lease extension is refused by the freeholder, you will become an assured tenant and your tenant will be the landlord to whom you pay rent. As an assured tenant you will have numerous rights but they will not be as extensive as a leaseholder’s rights. It is therefore crucial that you urgently seek legal advice if your lease is running out.

Will a short lease make it more difficult to sell my house?

Selling a leasehold house is likely to be difficult if you have less than 70 years to run on your lease. Generally speaking, the longer the lease, the more attractive the house is; it is therefore advisable to extend your lease. If you buy a house with a short lease it becomes harder to secure a mortgage and you will have to see out the 2 year people before you can extend the lease. For those considering lease extension, don’t forget to apply for the extension before your current lease runs out. If you leave it too late, you may lose your right to extend the lease completely.

What will happen to ground rent after the lease is extended?

In all likelihood, your ground rent will go up once you’ve extended the lease but it can only go up once the term left on your current lease has run out. Changes to the ground rent will take into account the value of the property at the time of the extension. This can go up again after 25 years. If you are locked in a dispute over the ground rent with the freeholder, a Property Tribunal may be needed to set the rent figure.

Interested in buying the freehold or extending the lease on your house?Call our specialists today

Are you a house owner? If you are looking for advice on lease extension or lease enfranchisement, our leasehold reform specialists can provide you with the specialist legal advice you need.

  • Call our team now on 0800 1404544, or
  • Send us an email via the contact form below.

Applying for Lease Extensions with an absentee freeholder

Lease extensions where you can’t track down your freeholder are more complicated. Why?

Many mortgage lenders simply refuse to lend money is on any leasehold properties with an absentee freeholder – which can obviously seriously affect the chances of a leaseholder in obtaining a mortgage or even marketing the property. This problem is made worse if the remaining lease term itself is relatively short.

It is likely to prove expensive, complex and lengthy to serve a statutory notice enforcing a lease extension if there is no freeholder or their whereabouts is unknown. In the Leasehold Reform (Housing & Urban Development) Act 1993, provision was made for dealing with the problem of freeholder absenteeism by applying for what is known as a Vesting Order through the County Court, which also has the power to grant a dispensation from the requirement to serve notice entirely.

What is a vesting order?

Any leaseholder seeking to extend their lease or group of leaseholders seeking to purchase the freehold of their block or claim the right to manage it, must produce evidence demonstrating reasonable efforts have been made to trace the absent freeholder before a Vesting Order can be granted. Admissible evidence to bruises includes providing freehold Office Copies (i.e. Proof of the freeholder’s ownership) showing the last known address of the freeholder, proving they no longer own that property and have moved to an unknown address, or providing statements confirming that a visit to the freeholder’s last known address has not provided the leaseholders with a forwarding address.

The County Court will either set a date for the Vesting Order hearing or, alternatively, rule on the basis of the presented facts if the judge is satisfied that reasonable efforts to trace the freeholder have been made. When your case has been proved, the Court will issue a Judgment setting out that the freehold may be acquired by the leaseholder(s) with funds to be ‘vested’ in the Court and defer the case to the First Tier Property Tribunal [which replaced the old Leasehold Valuation Tribunal or LVT in July 2013] for a ‘reasonable’ premium, in case the freeholder resurfaces in the future.

Vesting orders – is a hearing always necessary?

The First Tier Property Tribunal also hears many absentee freeholder cases without a full hearing by issuing directions for the leaseholders to comply with and timescales for documents to be produced by, such as the County Court Judgment, copy leases, the valuation for the leaseholders and the proposed TP1 land transfer form.

Whilst the leaseholder may, following grant of a Vesting Order, benefit from acquiring the freehold at a relatively low premium and then grant themselves a lease extension for a nominal premium, the procedure, legal costs and sheer aggravation involved could still be significant. Instruct our team of lease extension, right to manage and enfranchisement experts today who will be able to guide you through this complex process and help eliminate the worry from what can be a stressful situation.

Problems with an Absentee Freeholder? Looking for a specialist Lease Extension Law Firm?

Wherever you live nationwide, if you’re thinking of applying for a lease extension or a collective enfranchisement, call us today – our team are specialists in this really complex field and are happy to provide you with free initial legal advice on the phone.

So for advice from a specialist lease extensions law firm;

  • Phone our team on FREEPHONE [0800] 1404544 for FREE NO SRINGS ATTACHED initial phone advice OR
  • Email us using the contact form below

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

How Extending a UK Lease Gives You Peace Of Mind

Many homeowners regard lease extension [ if they are even aware of it] as a complicated and expensive procedure. Coupled with the apparently lengthy terms of most standard leases, it’s no wonder that leaseholders might be tempted to put off making a decision until “another day”. Sadly, procrastination in this case can have unpleasant consequences. Putting off a decision to extend a lease today can lead to reduced financial security and peace of mind tomorrow.

The main threat comes from the adverse effects of a short lease on the value of your property. If you allow your lease term to dwindle, you may be unpleasantly surprised at just how difficult it is to sell your property. Unless you’re fortunate enough to live in the tiny minority of desirable areas where people will always buy, a short lease property will prove very unpopular with buyers and lenders alike. A property that is difficult to sell is, of course, worth much less on the open market – and if you can’t sell it at all, it’s effectively worth nothing. Even if you don’t intend to sell, a great deal of your financial wellbeing is tied up with the value of your home. At the very least, you will jeopardise your own stake in the property, so there are compelling financial reasons to turn your attention to lease extension as soon as you possibly can.

Residential leasehold law also contains a hidden deadline that can leave you out of pocket unless you move quickly. This is the “marriage value”, a lump sum premium that you have to pay to the landlord if you extend a lease when there are less than 80 years to go on the original lease term. This sum is based on a projected increase in the value of the property, i.e., you have to pay part of the proceeds of a sale that hasn’t actually happened. If nothing else, avoiding the marriage value payment is a very good reason to move quickly and extend your lease now.

The good news is that a UK leasehold extension is a straightforward way to safeguard the value of your property and give you security and peace of mind in the future -provided you have the proper specialist professional advice and assistance. Most leaseholders are entitled to extend a lease by a further 90 years, in addition to the remaining term, by serving notice on the landlord. The new lease is then granted at a notional, peppercorn rent. Once you’ve made a decision to extend your lease, this part of the process can be safely left to the professionals. A valuer or surveyor will calculate the exact costs, based on local property prices and compensation to the landlord, and a solicitor specializing in lease extension work will take care of the paperwork for you.

Of course, all of this will involve some outlay on your part. However, your decision to extend a lease is a cost-effective way to invest in your own peace of mind and future financial security.

Considering Extending a UK Lease? Contact our experts now

Whether you want to know more about how to extend a lease or about how a freehold purchase could help you, for specialist FREE initial telephone Lease Extension Advice  – contact our specialist leasehold enfranchisement and lease extension solicitors

  • Call us today on 0800 1404544, or
  • Fill out the enquiry form below.