Leasehold Extension Solicitors
You may want to keep living in your leasehold home. You may want to maximise your property value for sale. Either way, extending your lease is the way to go. For that, you will need specialists in this kind of contract – leasehold extension solicitors.
Because extending your lease can be very beneficial. But it can also come with its own share of challenges and complexities. Not to mention the fact that this is a legal contract that can tie you down for years if non-beneficial changes aren’t made clear.
Here is everything you need to know about leasehold extension and whether and when you need solicitors to get it done:
Can I Extend My Lease?
There are two types of situations where you will be able to extend your lease:
- Voluntary lease extension – your freeholder agrees that you can extend your lease.
- Statutory lease extension – you have owned the lease for at least two years and the original lease term was over 21 years.
This latter option for statutory lease extension came into force following the Leasehold Reform, Housing and Urban Development Act 1993. This Act gives you the right to extend your lease for another 90 years and stop paying ground rent as long as certain conditions are met.
There are a few bits of small print. These are that you must not be using the property for business or commercial purposes and your landlord (the freeholder) cannot be a charitable housing trust.
But for most people, the Act means that as long as you have owned your leasehold property for two years, you are automatically able to extend your lease.
The only complication is if you own a leasehold house. This is getting rarer (most houses tend to be freehold), but different conditions do apply. You won’t pay a premium to extend, for example. You can only extend by 50 years instead of ninety. Also, your ground rent might go up. A lot.
In general, a little expert legal advice goes a long way when you’re planning to extend your lease.
How Do I Extend My Lease?
The vast majority of leaseholders extend their lease under the terms of the 1993 Leasehold Reform Act. The big advantage of this is that it lays out a timetable that your freeholder has to follow. The process normally goes something like this:
- Instruct a solicitor – Solicitors Near Me can find you the ideal specialist for FREE and with zero obligation to use them. Simply let us know what you need on 0845 1391399 or complete a Free Online Enquiry.
- Get a valuation – call in a surveyor who understands lease extensions to value your specific lease.
- Make a formal offer – your solicitor will draft a formal notice of the value and any updated terms in the lease and serve it to your landlord.
- Pay any deposit – this is usually 10% of the proposed value of the lease, £250 at minimum.
- Negotiate – usually, your landlord will have their own surveyor assess the price. There will then be rounds of negotiations (usually handled by your solicitor and the competing surveyors).
- Finalise – once a price has been agreed upon, your solicitor will draft your updated lease, confirming that your freeholder’s solicitor is happy with the terms. They will then register the update with the Land Registry.
In the event that you and your freeholder cannot agree on the price, if six months goes by there is a Property Tribunal that can make a decision for you.
How Much Does It Cost To Extend A Leasehold?
This depends on several factors, most importantly:
- The value of your property
- How long is left on the lease
- Potentially other factors, such as the value of any improvements you’ve made
But it’s the lease term and property value that play the major part in deciding how much it costs to extend a leasehold.
One important concept is known as “marriage value”. This states that if the lease drops below an 80-year level, the landlord is entitled to 50% of the increase in property value when the lease gets extended.
This is why short leases are often viewed with suspicion and perceived as both costly and riskier.
Do You Need A Solicitor For A Lease Extension?
Yes. Even if your landlord were to agree to a voluntary lease extension, you would still want the wording of your new lease to be looked over by a legal specialist.
This kind of law is constantly changing (check the Leasehold Reform (Ground Rent) Act 2022, for instance). You really need to know that you are protected and getting the best possible deal.