If you’ve got less than 90 years remaining on your lease then you really need to look into extending it.
Why should I extend my lease?
- By letting your lease run down, you’re unfortunately negatively affecting the value of your property, and a short lease will make people reluctant to buy it when you come to sell.
- If the property is mortgaged, you may find it difficult to remortgage, as some lenders may refuse if there are less than 85 years remaining.
- The longer you leave it, the more expensive it will be to extend.
What are the different types of lease extensions?
There are two different types – statutory, and voluntary.
If you’ve owned your property outright for over two years then you will qualify to obtain a statutory lease extension, and in short, a statutory lease extension allows you to add 90 years to the remaining term of your lease.
What are the pros and cons of a statutory lease extension?
- You are entitled to be granted an additional 90 years on top of the existing term of the lease.
- You would not have to pay the landlord ground rent, though you would still pay any service charge due under the terms of the lease.
- The statutory process is lengthy. There are various timescales that have to be adhered to and if these are not complied with, it can result in you not being entitled to claim another statutory lease extension for a further year.
- The cost of a statutory lease extension is often higher than a voluntary lease extension.
- You are required to obtain your own valuation of the property in order to determine the possible premium for the lease extension which kick-starts the process. We can refer you to a team of expert Surveyors, if necessary.
- You will also be required to pay the landlord’s legal fees and the surveyor’s fees.
With a voluntary lease extension, the landlord determines all the terms of the extension – they dictate how much you will pay and the length of the term that they will grant.
What are the pros and cons of a voluntary lease extension?
- You can approach the landlord for an extension without needing to comply with the strict statutory requirements.
- Generally, the cost of a voluntary lease extension is cheaper than a statutory lease extension though we cannot guarantee this.
- The landlord can also impose a higher ground rent if they wish to*. However, the terms of the lease extension are negotiable between the Landlord and Tenant.
- You could be liable to pay the landlord’s legal costs and surveyors’ costs as well as your own.
*Ground rent changed on 30th June 2022 for new leases. This put an end to ground rents for new, qualifying long residential leasehold properties in England and Wales. For more information on this click here.
Why choose ONP and Cavendish Legal Group?
We are experts in this niche area of law and will use our knowledge and skill to secure you a lease extension on the most favourable terms for you.
We will handle the process from start to finish until your new extended lease has been completed and registered at HM Land Registry.
We will take the hassle from you and only contact you for those urgent instructions that we need to ensure the process is run as smoothly for you as possible.
We also work alongside an expert team of surveyors who can assist when the need arises too.
For more information on lease extensions, check out this blog.
How do I extend my lease?
Please remember that the freeholder is not likely to approach you to do this, and they can charge more as the lease reduces in length, so it’s best to be proactive.