How do you know if you need to think about a lease extension?
When purchasing a property, it will either be leasehold or freehold. Freehold is when you own the property outright, including the land that it has been built on. If you own the freehold, that means you are responsible for the maintenance of the property and land.
If the property is a leasehold, it means that you own the property, but the land the property is on is owned by a landlord, the freeholder, so you may have to pay a leasehold rent charge and may face certain restrictions to how you treat the property. The “lease” is the contract that conveys a property for a specific term, and you will need to know how many years remain on it, and whether it needs to be extended or not. If your lease expires, ownership of your property technically passes to the freeholder so it’s important to keep an eye on this.
What does it mean to do a lease extension?
A lease extension is a process of obtaining more years on your lease, from the landlord, the freeholder. Lease extensions can happen in two different ways: statutory and voluntary. A statutory lease extension is applicable when you have owned a property for two years or more and allows an extension of 90 years to the remaining time, for a ‘reasonable’ premium.
A voluntary lease extension is when the landlord will determine the terms of the extension and dictate how much you will pay, although these can be negotiated.
Why should you consider doing a lease extension?
Extending your lease in good time could be beneficial for a number of reasons:
· If you run down the years on your Lease, it will have a negative impact on the value of your property.
· If you don’t extend your Lease, you may find it difficult to sell your property or even remortgage it later on.
· The longer you leave the Lease length to run down, the more expensive it will be to do.
How much does a lease extension cost?
A lease extension will vary from property to property, and we recommend getting in contact to find out how much you can expect to pay. To obtain a lease extension quote for our services, click here.
Alternatively, you can book a free consultation with one of our lease extension specialists by clicking here. You can also contact the ONP Group at firstname.lastname@example.org, or call us at 0161 549 3565.
Please remember that the freeholder is not likely to approach you to do this, as they can charge more as the lease reduces in length, so it’s best to be proactive.
For more information about our lease extension services, click here.