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Lease Extensions - Advice for Leaseholders

Background
Increasingly long leaseholders (of flats) are learning to there cost, that it is becoming frequently more difficult to sell their properties, once the lease has a period of near 80 years or less to run.

It now commonplace for prospective purchasers to insist that a lease in the region of 80 years, be extended before they purchase. Any prudent lessee should therefore consider obtaining an extension to the lease preferably before the lease reaches 80 years unexpired.  Once the lease has less than 80 years to run, it is essential that an extension be negotiated.

Valuation Matters
The valuation issues involved are fairly complex, but briefly the landlord (freeholder) is entitled to compensation for:

  • Losing the right to receive the ground rent income, which is payable under the terms of lease
  • Loss of the right to the reversionary interest at the expiration of the lease. That is to say the right to receive the flat back at the end of the original lease.
  • Where the lease has less than 80 years to run, under current legislation, the landlord is entitled to a 50% share of any additional value (marriage value), which results from the merging of the new and old leases. This is more precisely the difference between the freehold value of the flat and the combined value of the landlords and leaseholders existing interests prior to the grant of the lease extension. 

Why Act Now?
Because as time progresses the landlords interest will escalate in value, whilst the leaseholders interest will fall in value. Moreover any increase in value due to house price inflation, will as the lease shortens have to be shared disproportionably in the landlords favour.

The Solution
At Mike Stapleton & Co, we have been actively involved in negotiating lease extensions since the Leasehold Reform Housing and Urban Development Act 1993, first gave leaseholders the statutory right to an extended lease.  
Over the years we have settled countless cases, many involving highly contentious disputes with large powerful landlords such as the Freshwater group, Sinclair Gardens, Regis and the Church Commissioners, just to name a few. 
In the unlikely event that an amicable settlement cannot be reached, we will happily represent you at a Leasehold Valuation Tribunal, who in the absence of agreement will determine the price to be paid. We have a wealth of experience in representing clients at the Leasehold Valuation Tribunal.

Our geographical area of coverage extends throughout central and outer  London and the entire Home Counties.

Please take a look at our client testimonials to see what our customers think of us.

Contact
For a free informal discussion please call Mike Stapleton FRICS on 01702 562072 between 9am and 7pm, Monday to Friday. Alternatively if you prefer please click here to direct your query to us by e-mail.


 
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