Freed & Co – lease extensions for flats
Under the provisions of the Leasehold Reform, Housing and Urban Development Act 1993 (‘the 1993 Act’), qualifying tenants of flats have a right to the grant of a new lease for a term of 90 years plus the unexpired term of the existing lease at a ‘peppercorn rent’ i.e. a nominal sum, on payment of a premium to the landlord. Freed & Co are experienced and skilled lease extension solicitors dedicated to the negotiation of attractive lease extensions on your behalf.
Why are lease extensions a good idea?
A lease is a ‘wasting asset’. The shorter the lease, the less valuable the property and the higher the premium the landlord can charge for extending the lease.
When there is less than 80 years to run on the lease, the cost of lease extensions becomes considerably more expensive. This is because the landlord is entitled to a 50 per cent share of the ‘marriage value’. In broad terms, this means the difference in the value of the property before and after lease extensions. Marriage value is not payable where the lease has more than 80 years to run.
When the unexpired portion of the lease has less than 60 years to run, the property becomes virtually unsellable as mortgage lenders will not normally advance loans to purchase properties unless there is more than 60 years to run on the lease.
As a tenant do I qualify for lease extensions?
You will only require the services of lease extension solicitors if you meet certain criteria. A person is a qualifying tenant for lease extensions if he or she is a tenant of a flat under a ‘long lease’ i.e. one granted for more than 21 years.
To qualify for lease extensions, qualifying tenants must have owned their flat for a minimum of two years. There is no residence qualification. The right is open to both owner/occupiers and buy to let investors.
The right to a new lease is an individual right; it is therefore not necessary for the leaseholders in a building to form a group before contacting the lease extension solicitors.
How is the right claimed? Lease extension solicitors
The right is claimed by the service of a ‘Tenant’s Notice’ on the landlord, which gives information prescribed by the 1993 Act. Amongst other things, it must specify the premium which the tenant proposes to pay. The premium is negotiable but a realistic premium must be proposed, otherwise the Tenant’s Notice will be invalid.
Typically lease extension solicitors will take around six months to complete a lease extensions case. It can take longer if it is necessary to make an application to the court of Leasehold Valuation Tribunal.
Is the landlord entitled to a deposit?
The landlord is entitled, at any time after receipt of the Tenant’s Notice, to require the payment of a deposit. This may be 10 per cent of the premium proposed in the Tenant’s Notice or £250, whichever is the greater. The tenant may give notice to the landlord for the return of the deposit if the Tenant’s Notice is withdrawn. However, the landlord may deduct his costs from the deposit.
What is the next stage in the lease extension solicitor’s service?
The landlord must give a Counter-Notice to the tenant within the time limit specified in the Tenant’s Notice, which must be not less than two months after its service on the landlord. The landlord may either admit the tenant’s right to a new lease or deny the right. The right may only be denied on limited grounds.
If the landlord admits the right, the Counter-Notice must state which proposals are accepted and which (if any) are not accepted. It must specify, in relation to each proposal not accepted, the landlord’s counter-proposal.
If the landlord admits the tenant’s right to a new lease but the terms cannot be agreed, an application may be made by either party to a Leasehold Valuation Tribunal for a determination of the matters in dispute.
What if the landlord fails to serve a Counter-Notice?
The tenant may make an application to the court for a vesting order determining the terms of acquisition, provided that the tenant had a right to acquire a new lease. Lease extension solicitors should ensure the application is made not later than six months of the date on which the Counter-Notice was required to be given.
How are lease extensions granted?
Once the tenant’s right to a new lease has been established by the lease extension solicitors, and the terms of acquisition agreed or determined, the landlord has an obligation to grant a new lease on payment of the premium and any outstanding service charges and ground rent.
The landlord prepares a draft lease and gives it to the tenant who then has an opportunity to make amendments and comments. Once the final form has been agreed, completion takes place at the office of the landlord’s lease extension solicitors.
Which lease extensions costs should be covered by the landlord?
When undertaking lease extensions the tenant is liable for the reasonable costs of the freeholder, any intermediate landlord and any third party to the lease. Payment must be made of the costs incurred in:
(a) Undertaking an investigation of the right to a new lease;
(b) The cost of obtaining a valuation; and
(c) The cost of the grant of a new lease.
The tenant is not liable for the landlord’s costs of negotiation of the valuation, nor is the tenant liable for the landlord’s costs of Leasehold Valuation Tribunal proceedings.
What makes Freed & Co expert lease extension solicitors?
With Freed and Co each client is assigned just one expert from our team of lease extension solicitors, which ensures a targeted and efficient service as you have a dedicated port of call with an individual familiar with every aspect of your case. It is also a more cost effective process which guarantees the affordability of our lease extensions solicitor’s service; so not only are your lease extensions claims handled by an expert, they are also extremely competitively. Our lease extension solicitors have a wealth of experience dealing with the conveyancing process, as well as any potential disputes which may arise as well as problems with the Leasehold Valuation Tribunal. Our understanding of the lease extensions process is entire. Our lease extension solicitors developed their substantial experience by carrying out the lease extensions process in its entirety. What’s more, our expertise comes at a low cost as our prices are fixed at a level below that of our competitors.
Lease extensions are a two part process involving lease extension solicitors and surveyors. Freed and Co therefore works closely with and recommends surveyors to its clients, who are recommended not only on the basis of their expertise but also because they fees are transparent, reasonable and explained clearly at the outset.
Dedicated lease extension solicitors – our fees
We offer a dedicated and expert lease extension solicitor’s service for a fixed price of £950 plus VAT and disbursements (discounts offered for group lease extensions). This price includes the following lease extensions work (although we will carry out just stages 1 and 2 for a fixed price of £275 plus VAT):
Make the necessary checks to ensure you are entitled to lease extensions
Draft and serve the Initial Notice on your landlord (and any third party to your lease)
Negotiate and agree the form of the new lease, costs and any other terms of acquisition with the landlord (other than the premium which is the remit of your surveyor) once the landlord's Counter-Notice has been received.
Stage 4 (if required; if not we go straight to Stage 5)
Apply to the Leasehold Valuation Tribunal to protect your claim AND/OR to ask the LVT to determine a reasonable price for the lease extension AND/OR to ask the LVT to determine the landlord's costs if they are unreasonable AND/OR to ask the LVT to determine the terms of the new lease if the landlord is being unreasonable AND/OR to expedite the process if the landlord is delaying
Complete the Lease Extension once all terms have been agreed and register it at the Land Registry
If you are looking for the services of expert lease extension solicitors dedicated to keeping their prices low, then you won’t find a better deal than that offered here at Freed & Co. Our lease extension solicitors adopt an experienced and thorough approach to each and every case, ensuring you receive the very highest standards of service. To contact our friendly lease extension solicitors please call 029 2022 5472.
NB. Please note that in addition to your costs you will be liable for the Landlord's reasonable legal and surveyors costs. You also have to pay the premium.
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