How do I extend my lease? What can I get when I extend? How much will it cost me? How do I start the process? These are the questions people wanting to extend their lease need answers to. This article provides a basic guide on how to extend your lease without stress.
If you have owned a lease for more than two years - even if you haven't been living there - and it has over 21 years before expiry, then you can extend it. You'll be entitled to an extension of 90 years on top of your remaining term. The ground rent will be reduced to zero and the cost you'll have to pay (the 'premium') to be calculated under the legislation.
But how much is that premium? Well, the landlord is entitled to compensation for the loss he will experience on granting of the lease extension. This will include:
- the diminution in the value of the landlord's interest in the flat; that is, the difference between the value of his interest now with the present lease and the value of his interest after the grant of the new lease with the extra 90 years.
- the landlord's share of the 'marriage value'
- compensation for loss arising from the grant of the new lease.
Although you will have to speak to your landlord regarding a quote to extend your lease, it is always advisable to get a professional valuation of the cost of the extension, this can be used a basis. The same report can also be used if the matter goes to tribunal.
The formal procedure to extend a lease is started by the service of the tenant's notice on the landlord. However, there is much work to be completed before you start the procedure and a professional adviser such as a lawyer experienced in this area, can make extending leasehold property smoother and more efficient.
First you will have to check eligibility to see if you can apply for the leasehold extension and under what terms. Subsequent to this the landlord will assess the value of the premium, your own finances must be established and gathering the information. When this stage is completed you should be getting ready to serve the notice and prepare yourself for any next steps.
It's advisable to get acquainted with what specialist solicitors and surveyors could do for you. There services may include a full valuation, negotiations with the freeholder, the solicitor will then deal with any legal processes and documentation. In so doing you'll save yourself time and worries knowing that your property sits on the best possible place within the property market for saleability.