ALEPENFRANCHISEMENT
EXTEND YOUR LEASE
HOW TO...
Leaseextensions can seem tricky at first glance. This brief guide will equip you with a basic
knowledge of the process, where to start, and help you figure out what questions to be asking along the way
IN ASSOCIATIONWITH
Youhave aright to a lease extension
If youhaveowned your flat formorethan2years,you are legally entitled to a lease extensionof90additionalyears (that is, 90 years on top ofwhat you have left now), without a ground
rent.Inother words, the Landlord is compelledtogrant you this lease extension. The only issue to be agreed is how much you pay.
Step 2 Making an offer
Onceyouhave readyour surveyor’s report, youwillbeinaninformedpositionto enter into
1Formally,byinstructingasolicitor to serveaSection42
negotiationswith
theLandlord.Makinganoffercan bedoneinoneoftwoways:
Notice of Claim–whichoffersyour Landlordapremiumandclaims your righttoa90-year
leaseextensionwithoutagroundrent.The
Landlord is thenlegallyobligedto respondbywayofCounterNotice includingthecounterofferpremiumproposal,andmustdosowithin 2months of thedate ofyour Section42Notice.
2Informally,byway ofwrittencorrespondence.Outsideof
theprovisions of the relevant legislation,youandyour Landlord cancometowhateveragreement youdecide.Youcouldmake awrittenofferfor theequivalent of a‘statutory’lease
extension(i.e.90additional yearswithoutagroundrent), oryoucould proposedifferent
terms.These typesof negotiations should alwaysbeenteredintohaving takenprofessionaladvice,andwith caution. Your surveyorcanassist duringthis process.
Step 3 Negotiation
Once theLandlord’s counteroffer hasbeenmade, eitherbywayofa
formalCounterNotice orbyinformal correspondence, thenegotiations commence.
Thenegotiationof the premium payableusually takesplace
www.myleasehold.co.uk
betweentheSurveyors of the twoparties (Landlord andTenant).
Tribunal determines premium In caseswhereNotices have beenservedand theparties areunable to agree, Tenantsare able to applytoaLeaseholdValuation Tribunal (LVT)todetermine thepremiumthat should be paid. In theevent that thematterwas to proceed to theLVT,neither side wouldbecapable of recovering theircosts. This is always an importantnegotiating point, becauseitplaces theonusoneachside to be
realistic.Recoursetoatribunalcan be acostly wayofsettling thepremiumandshouldalwaysbeentered into as alastresort, and having undertaken an analysis of the cost compared to the benefit.
52 Step 4
Premiumagreed, leaseextended
Onceapremiumhasbeenagreed, thenewleasewillbegranted
throughyoursandtheLandlord’s solicitors.Your solicitorwill agreethetermsof the newlease.
Jargon busting
Landlord=Freeholder/Headlessee Tenant = Leaseholder/ flat owner Premium=money paid
Step 1 Valuation
Howdoyouknowhowmuchalease extensionwillcost?Or,howmuch tooffer
asastartingpoint?YouwillneedaChartered Surveyor toundertakeavaluation. It is always advisableto instructaspecialistSurveyorin this
areaofwork.Acomprehensivelist of specialist surveyorsandsolicitorscan befoundontheALEP(Association ofLeaseholdEnfranchisement Practitioners)website–
www.alep.org.uk
extendmy lease
Iwant to
Valuation report
received
Solicitorserves notice
CounterNotice received
Issue 14, Spring Flat Living
WWW.FLAT-LIVING.CO.UK
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