Leasehold Extension
The lease extension process involves a number of steps, starting with the tenant serving a formal notice known as a section 42 on the freeholder confirming that they wish to extend their lease. This notice gives the freeholder a period of between two and six months to respond to an opening offer on the premium payable for the extension. The tenant has the option of serving a counter-notice to reject the proposed offer and serve an alternative proposal for a higher premium.
Obtaining professional advice is key at this stage, so make sure that you ask a solicitor for help and guidance. They can ensure that the legal process is carried out in an efficient manner and provide you with a good understanding of the costs involved.
Finding a surveyor is also essential for any Leasehold Services extension application. Your solicitor will be able to put you in touch with a reputable surveyor that has expertise in the local property market and leasehold extension legislation.
Leasehold Extension Services
Once you have obtained a valuation from a surveyor you will need to serve a Tenants’ Notice on the landlord informing them that you are making a formal offer to extend the lease. This notice will contain a description of your property and an estimate of the amount you are willing to pay for the lease extension.
The value of your lease can vary a lot depending on the length of time left to run on it and the ground rents that are currently being paid. This can be a complex process and it is best to have a solicitor with expertise in the area advising you throughout.
Extending a lease is normally advisable when there is only a short period of time left to run on the original lease. This can be a good way of increasing the property’s value, especially as leasehold properties depreciate in value as they get closer to their end of life.
Providing the leaseholder has enough capital available to cover the costs of the extension it is usually possible for them to obtain finance from a lender. However, it is vital to understand that a mortgage lender will be likely to require a relatively long term on the lease before they will consider lending money on the property.
It is important to note that any leasehold property that has less than 80 years left on it is typically considered undesirable, and many financial institutions will not lend money on a property with such a short term remaining. The cost of extending such a lease is usually substantial, and it can be difficult to obtain a mortgage on such a property if the length of time left on the existing lease is only a few years.
A leasehold Advisory Service has a calculator which will give you an idea of the cost of extending your lease, but it is best to consult a professional. The solicitors at Wilson Browne can assist you at this stage and provide advice and representation to ensure that the process is as smooth as possible.