Features ENFRANCHISEMENT
Extending your lease
Tim Bishop tackles four of the questions most frequently asked by flat owners
When it comes to lease extensions, most flat owners understand the basics but there are some aspects that are always flagged up.
As solicitors specialising in lease extensions, we receive about 10 calls every day from leaseholders wanting to know more about the process. Some aspects of extending a lease come up time and time again, so here are four issues that continually cause consternation among our clients.
Can my freeholder withdraw from the transaction? This is an easy one. If you're going down the formal statutory route and have served the relevant legal notices (Section 42), then your freeholder has little say in the matter and can't pull out. However if you proceed with the more risky private or informal route to extend your lease, then you are very much dependent on your freeholder's goodwill - and there's nothing you can do to stop them pulling out at any stage.
Beware of unscrupulous freeholders – who have been known to offer full co-operation, only to pull out either when the remaining lease term drops below 80 years [when the
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marriage value kicks in and the price of lease extension premium increases] or just before exchange, only to ask for an inflated premium.
Do I really need a specialist lease extension valuation? Broadly you have four options when it comes to valuing the premium;
A full valuation carried out by specialist surveyor involving a flat inspection. This is the option we always recommend. If you go down this route, do make sure you get a specialist surveyor with plenty of expertise in this area, not someone who has done only the occasional lease extension. See panel on P49 about choosing the right professional advisor.
A desktop valuation – this is often a cheaper route and is certainly the second-best option. However it will never be as accurate as a full physical inspection and could miss out critical factors which could reduce the premium you need to pay.
Relying on an online calculator - these do have some use in giving you a rough approximation of the kind of premium you are looking at, but we never recommend
relying on them - they are far too inexact. By sticking with just an online calculation, you could end up paying well over the going rate. When it comes to selling your house or flat, would you rely on a verbal valuation from the bloke you met down the pub? No. So don't rely on an online calculator for your lease extension valuation either.
Doing without any sort of valuation - don't even think of going there. You are entirely at the mercy of your freeholder and none the wiser if they propose an exorbitant premium. Also, if you are following the formal route for your lease extension, you could invalidate your statutory Notice if your offered premium is too low.
How long will it take? This is a difficult question, akin to how long is a piece of string. However, in general terms, if you go down the Statutory route then, however efficient your solicitor is, you should expect it to take around six months.
Going down the informal route can be much quicker – but you really are entirely in the hands of your freeholder.
Issue 20
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