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Lease extensions 2021

Leaseholders who own flats have a right to extend their leases under the Leasehold Reform Housing and Urban Development Act 1993 if they meet certain Criteria (statutory route), or by asking they can contact their freeholder and see whether they are willing to negotiate an extension of the lease term informally (informal route).

Statutory Route

Under this route you start by serving a formal notice on your freeholder requiring that they grant you a new lease. You need to state the number of additional years that you wish to add to your lease term (you are allowed to request up to 90 additional years) you must also make an offer of premium for the additional years you wish to purchase.

We recommend that you would need to involve a surveyor at this stage to determine the amount that you ought to offer in your notice for the premium. It is important that you make a reasonable offer based upon the market value of the additional term of years you are asking the landlord to create for your benefit.

You and your freeholder and will then need to follow a procedure and strict timescales set out in the law. This route offers more protection to a leaseholder if the parties cannot not agree the terms and/or the price. If agreement cannot be reached upon any terms of the proposed extension of the lease then you have the right to apply to the Leasehold Tribunal to decide on the issue.

Informal route

Under this route, you can approach the freeholder in the first instance and ask whether they are interested in negotiating an extension to the lease term. There is no obligation on the freeholder to respond or to agree to extend the lease following this request and if they don’t agree or respond then you can go down the Statutory Route at that point. If the freeholder agrees to grant a new lease then you can instruct your solicitor to proceed.

It is worth starting the process informally as it could save time and money. But if negotiations fail, then leaseholders who comply with the criteria, can use the formal route to try and extend their lease and go to the Tribunal if no agreement on the price or terms can be reached.

We would recommend that you need expert legal advice from the outset as it is vitally important to make sure that notice are served in the correct form and that the form of lease used is the right one and contains all the required statutory information.

Do I need a solicitor for lease extension?

Yes, we think so. It is very important to ensure that any notices served are in the correct form and that the form of lease used complies with the statutory requirements. Unless you are very experienced in dealing with such things yourself you will need legal advice.

How much does it cost to extend a lease UK?

You will need to consider:

The premium. This is how much you will have to pay the landlord for the additional years that you wish to purchase. It will depend on the market conditions in your area and on the terms of your existing lease. We recommend that you employ a surveyor to assist you in calculating a fair premium.
The landlord’s legal costs. You have a legal obligation to pay them. Usually in the range of £750-£1,500.
Your own legal costs. Your own solicitor will charge you legal fees and you should obtain a fixed quotation up front before proceeding.

How long does it take to extend a leasehold?

Typically 3-6 months depending on how co-operative the parties involved are with each other are.

Can I extend my house if its leasehold?

Yes, or you can apply to buy the freehold provided you qualify under the legislation.

Why are lease extensions so expensive?

When you extend the number of years on a lease that lease becomes more valuable. You have to pay for this as you would for any valuable benefit you wish obtain from someone.

What happens when the lease runs out on a leasehold property?

The premises will revert to the landlord and you no longer have any right to stay there.

Can a freeholder refuse to renew a lease?

Provided you qualify as a tenant under the definitions set out in the Leasehold Reform Act 1993 the landlord has no way of refusing to grant a lease and if they try you can enforce matters through a Tribunal application.

What is the difference between a formal and informal lease extension?

See the article above

How do I extend my lease on my flat UK?

See the article above

Posted by on 17/03/2021 in Lease extensions

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