We have an established and experienced team of Chartered Surveyors acting for the owners of leasehold properties in claims to acquire the freehold, or an extended lease.
Leasehold extensions
A leaseholder with an unexpired term of 21 years or more on the original lease and who has owned the property for two years or more can apply for an extension under the Leasehold Reform, Housing and Urban Development Act 1993 (subject to a few other criteria).
A successful application for flats adds 90 years to the unexpired term, and this will add extra value to the property – as well as meaning that you will not have to pay ground rent for the duration of the extended lease.
This is important, as, as a lease gets shorter, the value of the lease decreases and it also becomes more expensive to extend. It can also be difficult to sell a property with a short lease as most lenders will not grant mortgages on leases of 80 years or less.
It is also worth seeking professional advice from us on whether to apply for a lease extension before putting a property up for sale if you have a short unexpired lease term left.
The Process
A notice (Section 42) under the Act is first of all served on the freeholder outlining the intention to extend the lease, and specifying a date for response. If the landlord does not respond within two months or responds late, the leaseholder can apply to the County Court for a lease extension on terms set out in the notice within six months from the date the freeholder is supposed to serve the counter-notice. A solicitor would normally be involved here, and we can recommend excellent solicitors if you do not have one already, who we have worked with over many years.
If you cannot agree on premium, an application can be made to the First-Tier Tribunal (Lands Chamber) for determination. We would, as professional advisors, work on your behalf to try and negotiate a price first to avoid delays and costs.
Leaseholders can also negotiate informally with freeholders but would not have the protection of the process under the Act, and cannot refer the matter to the First-Tier Tribunal for determination. We would however be happy to advise you in this respect.
When receiving advice from our surveyors here at OP on each stage of the process, all our advice is provided by fully qualified RICS members and this will give you peace of mind and confidence – and also reassurance that your surveyor is delivering a high quality, reliable and cost-effective service based on RICS standards of practice.
By commissioning a valuation report on the leasehold or freehold value by an RICS member you can also feel assured that the service you receive is impartial and reliable.