Offering assistance in the lease extension process.
What is a leasehold interest?
When owing a property, the main types of ownership (i.e. tenure) are Freehold and Leasehold interests. With residential property flats are held on leasehold interests and to a lesser extent this will apply to houses also.
The leasehold interest is the entering of a legal agreement between the freeholder and the leaseholder to own the property. The lease will state responsibilities and obligations of both parties and will also mention the period of time the property is to owned, which is known as the ‘term’. For example, the term of 99 years or 125 years from a specific date.
As time passes the term will gradually become shorter and result in a lower unexpired term. For example, 99 years from 1990 and the date of valuation being 2020 equates to 69 years unexpired.
What is a Lease Extension?
A lease extension adds a number of years onto the unexpired term of the leasehold interest. A lease extension can also be known as ‘acquiring a new lease’. Acquiring a new lease should not be confused with purchasing the freehold. Please refer to ‘Collective enfranchisement’ for details.
The ways to extend your lease are the formal and informal routes (also known as the statutory and non-statutory methods). When the lease is extended there is usually a ‘premium’ for this to the freeholder. The premium is a sum of money to extend your lease.
Can I extend my lease?
The lease can be extended either the informal or formal route, but the method selected is dependent on your individual circumstances. In most cases it is recommended to select the statutory route of extending your lease, however you are required to satisfy the qualifying criteria of the relevant Act. For example, with flats this would be under The Leasehold Reform, Housing and Urban Development Act 1993 and for houses The Leasehold Reform Act 1967.
How Blackacre can assist
Whether you need an idea of the premium payable or require assistance to negotiate the premium on your behalf, we at Blackacre surveyors can help. We act for both Freeholders and Leaseholders and will aim to achieve the best result possible.