Leases are all fixed for a certain period of time, the shorter the lease the greater the cost to renew. Some leases are called virtual freehold leases and they are for a period of 999 years, we aren’t concerned with these leases we are concerned with 99 year leases or 125 year leases which have 85 years or lease to run. Issues can arrive either selling or re-mortgaging a short lease. If you need to get a mortgage to buy a leasehold property you will find very few banks willing to lend on leases with under 80 years left on the lease. If you are selling a property with lease than 80 years you may find that you can’t find a buyer, we can help buying extending the lease and provide clear time-frames and fixed fees from the outset.
The are two ways to extend the term of a lease.
Both methods have advantages and disadvantages, we recommend that all client use the formal protected route, but to discuss other options please feel free to contact our team.
The Landlord and Tenant may informally agree to extend the lease for certain period of time for a certain value, depending on the negotiating positions of the parties this may produce a fair result, it may not though. Under the informal route the Landlord can still charge and indeed increase the ground rent, under the formal regime the extension period is fixed, the value attached is measured and quantified by surveyors and the obligation to pay ground rent is removed going forward.
The preferred method to extend leases is to rely on the notices and provisions under the Leasehold Reform Housing and Urban Development Act 1993.
We can help you with every aspect of residential lease extensions. Our experts will protect your interests and keep you fully advised of all the implications.