LEASEEXTENSIONS
Making it haPPen
If youwant to extend your leaseyou will need to take professional advice. GrahamJaffe and KaTieCohen explain what is involved
The lease exTension process starts with thevaluer.Avaluation report calculation fromaqualifiedand experiencedleasehold enfranchisementvaluer(seepage48for more on thevaluer’srole) setsout thelikelycost of the lease extension. The valuer will also suggest thepremiumto be inserted into theSection 42 Noticewhichtriggers the statutory procedure foracquiring thenewlease. This premiumis generally 15-20%belowthe valuation. Enterthe solicitor. He or shewillinclude
thepremiumin theNoticetobeservedonthe freeholder andany otherlandlord andwhich outlines theleaseholder’sclaim to extend
thelease.ThisNoticeispivotal to thewhole lease extension process andmust be prepared by a solicitor specialising in leasehold enfranchisement.
Servingnotice TheNoticeshouldpreferablybeservedby hand and proof of delivery requested so that it can’tbedisputedatalater date. TheNotice must be served onwhat is knownasthe ‘competent’landlord -the personwhohas the legalright to granta90-year leaseextension. This is generallythe freeholder,although in somecases theremay be intermediate landlordsaswell. Allrelevantlandlordsmust be served with a copy of the Notice and this also includesmanagementcompanies and any other party to the existing lease. TheNoticeshouldgivearesponsedatenot less than twomonths (twomonths and ten
days is advisable) fromthedateitwas served andthe registered owners of theflatmust sign theNoticepersonally. It can’tbesignedunder aPower of Attorney andifthe leaseholderis a company, that companymust execute the Notice in accordance with itsMemorandum and Articles of Association. Theleaseholder’ssolicitor will then lodge
a‘Unilateral Notice’atthe Land Registry againstthe freehold andany intermediate leaseholdtitles. Thefee payablefor this is £50. If thepropertyinquestionisnot listed by the Land Registry (ie, it is unregistered), a
served fixesthe valuationdate
ClassC(iv)LandChargeshouldbelodged. This provides protectionfor theleaseholderifthe landlord decidestosellthe freehold andmeans that thelease extensionprocesswillcontinue as if the newowner had received the Notice.
coSt oF the leaSe Thedatewhenthe Notice is served fixes the valuationdate. Thismeans that variables
Once you have found a solicitor to act on your behalf he or she will: WhATISThE rOLE Of ThESOLIcITOr?
nCheckwhether the leaseholderqualifiesfor a leaseextension; nDraft the section 42 Notice and serve it on the ‘competent’ landlord (usually thefreeholder) andany intermediate landlord; nDeduce title and pay the statutory deposit to the competent landlord’s solicitor;
50
nMake access arrangements forthe valuer/s acting for the landlord/s; nReceive thecounter notice and send a copy to the appointedvaluer nArrange for the valuers to open negotiation nApplytothe LVTnot less than twomonths and not morethansixmonths from
thedatethatthe counter notice is served. This protects theNotice and makes sure it is not thought to have beenwithdrawn; and nNegotiate theterms of the newlease with the competent landlord’s solicitor and agree the costs that the leaseholder will be expected to pay.
Fixingthe
Thedatewhen theNoticeis
such as the unexpired term of the lease, the present value of the flat and its assumed future value are set and any further changes will notaffect
negotiations.The competent landlord’ssolicitor acknowledges receipt– normallywithout admittingthe validity of theclaim –and will include currentcopiesof theleaseholdtitle,afullcopyofthe leasewith acolouredplanand arequest forthe statutory depositwhich equatesto10% of thetotal premiumoffered in theNotice. Thesolicitor will then request accessarrangementstothe flatsothatthe landlord’svaluercan carryout his or her valuation of the property. Thecompetent landlordmust servethe
leaseholdervia hisorher solicitorwitha ‘counternotice’, no laterthanthe response date specified in theNotice. This will set out whetherornot theclaim foralease extension is accepted and any other terms of the lease extensionwhich thelandlordmaywant included in the newlease in due course. The valuers appointed by the leaseholder
andfreeholderthenhavethe opportunityto negotiate and agree terms acceptable to both parties. It is open to either partytoapply to theLeaseholdValuation Tribunal (LVT)not less than twomonthsand notmorethansix monthsfrom thedateofthe counternotice. In a minority of caseswhere agreement can’t be reachedbynegotiation,thematter can be heardbythe LVTwho will determinethe premiumand terms of the lease extension if thesecan’t be agreed in advance of the hearing.
What Will it coSt? Leaseholders areliablefor theirownlegaland valuationcostsand–where oneisneeded –the fees of abarrister and/or valuer to represent
Autumn2011 Flat Living
Page 1 |
Page 2 |
Page 3 |
Page 4 |
Page 5 |
Page 6 |
Page 7 |
Page 8 |
Page 9 |
Page 10 |
Page 11 |
Page 12 |
Page 13 |
Page 14 |
Page 15 |
Page 16 |
Page 17 |
Page 18 |
Page 19 |
Page 20 |
Page 21 |
Page 22 |
Page 23 |
Page 24 |
Page 25 |
Page 26 |
Page 27 |
Page 28 |
Page 29 |
Page 30 |
Page 31 |
Page 32 |
Page 33 |
Page 34 |
Page 35 |
Page 36 |
Page 37 |
Page 38 |
Page 39 |
Page 40 |
Page 41 |
Page 42 |
Page 43 |
Page 44 |
Page 45 |
Page 46 |
Page 47 |
Page 48 |
Page 49 |
Page 50 |
Page 51 |
Page 52 |
Page 53 |
Page 54 |
Page 55 |
Page 56 |
Page 57 |
Page 58 |
Page 59 |
Page 60 |
Page 61 |
Page 62 |
Page 63 |
Page 64