Extending your lease is a statutory right awarded under the Leasehold Reform Act 1993. It allows leaseholders to extend their lease for a further 90 years on top of the remaining term. As well as this, once extended the leaseholder will no longer be liable to pay ground rent.
The lease extension process is kicked off by the tenant servicing notice on the landlord (Tenants Notice), once this is served on the freeholder the whole process is quite documented.
The initial qualifying criteria for getting a lease extension is that the flat must have been owned by the tenant for a minimum of 2 years and the lease should have initially been grated as a ‘long lease’ (i.e. 21 years or longer). There is no formal need for the leaseholder to have lived in the property for those two years. In light of this, if a tenant has owned their flat for 2 years and took the lease on for more than 21 years in the first place, they should be entitled to an extension. This rule is not set and fast however, and often tenants will find themselves eligible where they didn’t think they were and unfortunately visa versa. Due to this, legal advice should always be taken first.
You should know that once you have served the Tenants Notice this actually an assignable right, therefore you can sell this right with the flat. This consequently means that the leaseholder can serve the notice and sell their property at the same time adding value to the sale. This will improve the saleability of the flat.
Before you can extend your lease you need to know that you have the right financial backing. You will not be able to extend your lease if you do not have sufficient money to do so. Part of the money you will need to raise is; your solicitor’s fees, your surveyor/valuers fees and all the landlords fees for the same services. When dealing with these professionals, you need to know that everyday high street solicitors and valuers will not do lease extensions very often, if at all. Due to this, you will need to make sure that you dealing with a specialist in the area of extending a lease.
Extending a lease is not a quick process. It often takes up to 6 months to complete and can be even longer where a landlord refuses your offer and you have to bring a claim before the Leasehold Valuation Tribunal. Nevertheless as a leaseholder, it is a positive move to make and can considerably increase the value of your flat.