Potential Pitfalls When Applying For a Lease Extension

If you are considering a lease extension, you are probably aware of the increase in value it will bring to your flat. But you need to take care not to fall into any of the following traps.

If you are in the process of selling your property, make sure that your agent knows that you are applying for an extension. Extending your lease will add significant appeal and value to the sale.

Get legal advice when you are drafting your statutory notice to extend. The legal process for leasehold extensions is fairly strict. Taking advice from an experienced lease extension solicitor will mean that you meet all your deadlines, and will also encourage your landlord to follow the statutory requirements in his responses.

Ask your solicitor for a reasonable quote for the transaction and when budgeting, be aware that you will most likely be responsible for paying your landlords legal costs as well as your own. However rest assured that your landlord does need to make sure that his/her legal costs are reasonable - failing which you can always challenge those costs at a Leasehold Valuation Tribunal.

A landlord offering a lease extension for a ridiculously high premium obviously wants to discourage you from extending your leasehold agreement. Try to find out the landlords reasoning behind his/her actions and attempt to negotiate on these points. If this does not work, you should remember that if you qualify (as above) then the Leasehold Reform Act 1993 legally entitles you to a lease extension. This basically means that, should you be faced with a worst case scenario, you can take your landlord to a Leasehold Valuation Tribunal and thus force him to give you an extension at the market rate. It is also worth noting that a tenant can bring a claim under s.20(c) of the Landlord and Tenant Act (1985) which states that the landlord is not allowed to claim back any legal costs he incurs during the process.

If the landlord is aware that you plan to sell the property and so 'need' to extend your lease, this could encourage him to demand a higher price for it. Try to keep your intentions private to ensure that you get a fair deal.

Sometimes the landlord is absent and therefore cannot be contacted using the traditional notice procedure. If this happens, you will have to go to the county court and apply for a vesting order. If the county court is satisfied of your eligibility to have a leasehold extension, then it will normally grant the extension in your favour. The court will refer your case back to the Leasehold Valuation Tribunal so that they can work out the amount of premium that you must pay to the absent landlord.