Flat Lease Extension FAQs
We know that extending a lease can seem like a daunting process – where do you begin? Our leasehold enfranchisement solicitors provide you with the answers.
Please note this lease extension FAQ relates to extending leases of flats (rather than leases of houses – which have separate requirements and processes).
What is a leasehold property?
If you live in a leasehold property, in the simplest terms, you own the lease of the property but not the land it sits on.
When the landlord first sells a flat to someone, they do so by creating a lease for a specified period, so for example this might be a lease of 99 years from 1st January 1970. When the first owner sells the flat, they sell the remaining term of the lease.
The lease specifies how long you have the right to live in that property as a tenant of the landlord or freeholder (though you still have the right to sell the property.)
In the example above therefore, if the first owner of the flat sold it to someone else in 1990, the new owner would have 79 years remaining on the lease. Someone buying the flat in 2019 (if the lease has not been extended) would have 50 years remaining on the lease.
What is a lease extension?
A lease extension is the process you go through as a leaseholder (flat owner) to increase the number of years left on your property’s lease. The majority of flats are leasehold properties.
Am I eligible for a lease extension?
To apply for a lease extension of a flat formally, you will need to meet certain eligibility requirements including that you much have been the registered owner of your flat or property for at least 2 years and your lease needs to have been longer than 21 years when originally granted.
You may however be able to come to an informal agreement with your Landlord if you do not meet the formal criteria.
Our lease extension solicitors will be able to advise you further regarding your eligibility for a formal lease extension or other informal options.
How can I find out how long is left on my lease?
If you are already living in a leasehold property, you should have been provided with a copy of your lease when you purchased the property. If you are unable to locate a copy of your lease, you can contact the Land Registry for this information, for a nominal fee.
How much will it cost to extend my lease?
The cost of a lease extension will vary depending on a number of things, including (but not limited to) your flat’s market value, the number of years remaining on your lease and the cost of annual ground rent. You will need specialist valuation advice from an experienced lease extension valuer, who we can put you in contact with.
You can use our lease extension calculator to find out roughly how much you can expect to pay for your lease extension.
Please note our lease extension calculator is intended to give a broad estimate only; a suitably qualified leasehold enfranchisement valuer will be able to advise you what you can expect to pay in your circumstances. Contact our lease extension solicitors today for a more information on how much you might expect to pay for your lease extension.
When should I think about extending my lease?
In most cases, our leasehold enfranchisement solicitors suggest that you consider a lease extension as soon as it falls below 90 years remaining. Certainly, you should not allow your lease to fall below 80 years remaining if at all possible, as at this point the price of a lease extension increases dramatically.
Why is maintaining a long lease important?
Maintaining a lease of at least 90 years is beneficial for a number of reasons:
- you will find it much easier to sell your flat;
- some mortgage lenders will not lend to people looking to buy a property with a lease of under 85 years remaining;
- when your lease falls below 80 years remaining, it has a negative effect on the value of your property.
How do I extend my lease?
Under the Leasehold Reform, Housing & Urban Development Act 1993, qualifying flat owners have the right to extend their lease by an additional 90 years and stop paying ground rent.
There are however two ways of extending your lease: the formal ‘statutory’ way (making a claim under the Act mentioned above) or the informal way (by mutual agreement with your landlord).
Our solicitors suggest it is preferable where possible that you pursue the formal, legislative method for a lease extension, as it provides you with certain protections (against increasing ground rent prices, for example,) that informal negotiations with your landlord won’t give you.
The first step to formally extending your lease is to get in touch with a qualified leasehold solicitor to help guide you through the process, which has a number of pitfalls and potentially costly consequences for anyone inexperienced in leasehold enfranchisement work . An expert leasehold enfranchisement surveyor will also be required to give you a more accurate lease extension valuation; our solicitors work with a number of experts in this field and so can assist you in selecting one.
What happens if my landlord doesn’t agree to my terms to extend the lease?
If you do decide to proceed with the informal route but are unable to agree on acceptable terms with the freeholder, then you can choose to adopt the formal statutory route and issue them with a Section 42 Notice. They will then need to issue a Counter-Notice of their own within a set amount of time.
Our lease extension solicitors can draft a Section 42 Notice on your behalf and issue it to your landlord, and, along with your surveyor, oversee negotiations to ensure you get a good deal.
If you would like more information about the formal statutory process, please contact our expert lease extension solicitors today to request a free copy of our Overview of the statutory process.
Can the seller of a flat start the lease extension process on my behalf?
Yes; if you are hoping to purchase a flat but you don’t want to have to wait 2 years to extend the lease, you can ask the current occupier to begin the process for a lease extension on your behalf. Once the Section 42 Notice has been issued, this can be transferred over for you to continue.
One of our lease extension solicitors will be able to advise you further when it comes to purchasing a flat with a short lease and the best way to proceed.
Am I responsible for any other costs other than the price of the lease extension?
Yes; alongside the cost of your lease extension, you will be responsible for your own legal and valuation fees and the landlord’s reasonable costs and valuation fees.
Whilst it can be tempting to try and apply for a lease extension yourself, you should know that leasehold enfranchisement is a complex area of law with numerous pitfalls. Your first step should be to seek legal representation from a professional solicitor well-versed in conducting lease extension claims and leasehold enfranchisement work. You should ask your solicitor whether they are a member of ALEP (the Association of Leasehold Enfranchisement Practitioners).
We have a team of highly experienced leasehold enfranchisement solicitors here at Trethowans who can help you apply for a lease extension. We ensure that all the right boxes are ticked throughout the process and will provide you with the very best advice on how to proceed – contact us today.