Our residential conveyancing solicitors have been carrying out lease extensions for a number of years and can provide comprehensive advice and guide you through what can often be a complicated process.
When you purchase a leasehold property you acquire the right to live in the property for a set period of time. For example, the lease could be granted for a period of 99 years or 125 years, or some other term, as agreed between the parties at commencement of the lease and although this may seem like a long period of time, as the years pass, the term of the lease reduces.
Why Extend a Lease?
Once the term left to run on the lease reaches 80 years or fewer, some lenders may not wish to lend against the property. As the lease becomes shorter the cost of extending the lease becomes greater and the freeholder is entitled to a share of the increase in the value of the flat should the lease be extended.
The right to request the lease extension generally starts once you have owned the property for two years. If you are thinking of selling a property which has a relatively short lease, you may wish to consider obtaining and completing a lease extension prior to marketing the property, as this may make a difference to the sale value.
Alternatively, if you are purchasing a leasehold property, once you look carefully at the length of the lease term remaining, you may wish to seek advice of a solicitor regarding the cost of an extension, and make sure that any investment in this type of property is a sound investment.
How can a Lease be Extended?
There are two options when it comes to extending a lease;
1. The Informal Route:
The amount to be paid to the freeholder is settled by way of negotiation.
2. The Formal Route:
An agreement is reached through following a particular procedure set out by legislation.
Our solicitors can explain both of these routes, so that you are more able to decide which is preferable. We can then assist with either route, whichever you choose to take.