The majority of apartments in the UK are sold leasehold, meaning that if you buy an apartment, you most likely have a lease, which is a legal arrangement between the tenant and the landlord, or freeholder. For the term of the lease, you have conditional ownership.
The terms and obligations of the lessee, like paying ground rent and maintenance fees, as well as the landlord’s obligations, such as maintaining the property, will also be outlined in the lease.
The term of a lease is the specific duration for which it is granted. It is a depreciating asset, meaning that its value falls as the term gets shorter.
A lessee may increase the remaining term of their lease by an additional 90 years through a statutory lease extension. In this article, Statutory Lease Extension, we take a look at the process and mechanism involved.
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For a free initial discussion with a member of our New Enquiries Team, get in touch with us today. We are experienced in dealing with all the legal aspects of Statutory Lease Extensions, and once instructed, we will review your situation and discuss the options open to you in a clear and approachable manner. Early expert legal assistance can help ensure you are on the best possible footing from the start and also avoid the stress of dealing with these issues on your own. Simply call us on 0345 901 0445 or click here to make a free enquiry and a member of the team will get back to you.
What is the procedure for extending your lease?
Serving the relevant freeholder or landlord with an initial notice of claim is the first step in the statutory procedure. After this is served, a predetermined statute of limitations starts. After that notice is served, the recipient has two months to respond with a counternotice.
During the lease extension process, there may be serious repercussions for the party who misses a statutory deadline and the claim is typically “deemed withdrawn.” Thus, the immediate right is forfeited. Under these circumstances, the leaseholder must wait an entire year before starting the procedure anew which can prove to be costly.
It should be noted that there are other ways to extend your lease, aside from a statutory lease extension. With a voluntarily lease extension, you can arrange a lease extension with the freeholder directly through an informal method. This is especially advantageous if you get along well with your landlord because, in the short run, this informal agreement might be quicker and less expensive than going through the court system. It’s also possible to settle on more accommodating conditions for the lease.
If this is an option you are thinking about, keep in mind that a dishonest landlord could overcharge you to extend your lease, only agree to a short-term extension, or raise your ground rent charges later on. These are all things that could negatively affect your finances and your ability to sell your property in the future.
How do I qualify for a lease extension?
If you have held the flat for two years, you are eligible for a statutory lease extension as the leaseholder. After that, you can extend the lease by 90 years with no further ground rent due.
A surveyor uses a calculation outlined in the Act to determine how much you must pay to renew your lease. After that, you can include this sum in the “section 42 notice” you provide the landlord. The cost of extending a lease increases with its length. A lease that is shorter than 80 years is not recommended since the rent will go up even more and the tenant will have to pay the landlord a “marriage value.”
The landlord has two months to reply to the section 42 notice, therefore ideally you should have a solicitor serve it on them. The counter-notice from the landlord will indicate whether or not they accept the extension and the cost.
Either party may file an application with the First Tier Tribunal (Property Chamber) if the landlord grants your request to extend the lease but objects to the proposed cost. If six months after the counter-notice was served and the issue is still unresolved, you must cancel the extension notice and wait a full year to reapply.
The cost of the survey and legal fees required by the landlord in order to approve the lease extension is the tenant’s responsibility.
How we can help
We have a proven track record of helping clients with statutory lease extensions. We will guide you through the process and ensure all checks are carried out swiftly and efficiently and we firmly believe that with the right solicitors by your side, the entire process will seem more manageable and far less daunting.
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How to Contact Our Commercial Property Solicitors
It is important for you to be well informed about the issues and possible implications of a statutory lease extension. However, expert legal support is crucial in terms of ensuring a positive outcome to your case.
To speak to our Commercial Property solicitors today, simply call us on 0345 901 0445, or click here to make a free enquiry. We are well known across the country and can assist wherever you are based. We also have offices based in Cheshire and London.
Disclaimer: This article provides general information only and does not constitute legal advice on any individual circumstances.
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