Solicitors in Essex & London
Leases are what is known as a "diminishing asset". This is because when you buy a lease it has a set number of years left to run and as time goes by this decreases. Once a lease has less than 80 years left to run it will cause difficulties when you come to re-mortgage the property, sell the property, and can dramatically increase the cost of a lease extension.
If the landlord and tenant have agreed to extend the lease then the process is straightforward. We can help you record this agreement or negotiate the terms of the extension before registering this with the Land Registry.
The Leasehold Reform Housing, and Urban Development Act 1993 (as amended) enables tenants to extend their lease on set terms in return for paying the landlord a premium. The set terms are:
The steps involved are:
If the terms of the extension are fully agreed then you should consider using the voluntary method to extend your lease. However, until the lease has been executed either party can decide to withdraw and would not face any consequences.
The statutory route offers more protection. There are clear rules and set timeframes which apply to both parties.
The terms of the lease extension are largely fixed meaning that both parties know at the outset what the outcome will be. The statutory route allows either party to apply to the Tribunal if there is a disagreement about the terms of the lease, something not available under the voluntary method. Finally, the statutory method commits both parties to the extension process and penalises any party which withdraws from the process after the initial notice is served.
Both sides will normally incur the cost of a professional surveyor to advise them of the potential premium payable and negotiate this figure with the other side.
Once the S.42 notice is served the tenant becomes liable for the landlord's reasonable surveyors costs and reasonable legal costs (drafting the lease and checking the tenant's right to claim a lease extension). The costs incurred in negotiating the terms of the lease or dealing with any application to the Tribunal are paid for by each party.
If the lease is being extended voluntarily the tenant will usually pay an agreed amount to cover the landlord's costs.
The tenant will have to pay the premium to the landlord. Some mortgage lenders also charge a fee to the tenant before they will provide their consent to a lease extension.
Pinney Talfourd have experienced and specialist solicitors who regularly deal with the lease extension process, challenging extension claims, and representing clients in the First-tier Tribunal (Property Chamber).
We have established relationships with local surveyors who will be able to advise you on the premium payable and the best approach to take in negotiations.
We are experts in the field of enfranchisement and are committed to working with you to ensure you achieve the very best possible outcome.
If you feel that you require further legal advice relating to lease extensions or enfranchisement, feel free to contact any of our residential property litigation solicitors directly to discuss your legal issues in more detail. Our team offers consultations in any of our five offices across Essex and London, or, if more convenient, we are happy to meet you onsite at your own premises.