extension of leases

The Leaseholder's rights?

The Leasehold Reform, Housing and Urban Development Act 1993, amended by the Commonhold and Leasehold Reform Act 2002 entitles a Leaseholder to purchase an extension of 90 years to the existing lease term at a zero ground rent subject to the following:

a) the Leaseholder must have owned the flat for the least 2 years

b) the original Lease term must be greater than 21 years

c) the Leaseholder does not need to be resident in the flat

The cost of the Lease Extension 

This is assessed in three parts:

a) the value of the ground rent income

b) the value of the Freeholder's reversion at the end of the lease

c) 50% of the 'marriage value' i.e. the amount that the value of the flat increases when the Lease is extended.  This sum is not payable if the existing lease has more than 80 years unexpired.

The Leaseholder pays the Freeholder's legal costs, valuation costs and Stamp Duty.

How is the price agreed?

The Leaseholder's solicitor serves a notice on the Freeholder making a monetary offer.  The Freeholder either accepts or serves a counter-notice giving his asking price.

The parties then negotiate a price, but, if they fail, either may submit an appeal to the Leasehold Valuation Tribunal which determines the price to be paid.

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Calculating the price

We can calculate the price on behalf of either party following inspection and perusal of documents including the Lease. 

Negotiating the Price 

We can negotiate the price for either party.

Valuations and negotiation fees?

Fees vary from case to case.  We provide fee quotations if given basic details.  Representing clients at the Leasehold Valuation Tribunal and providing expert witness reports are charged at an hourly rate. 

Further information?

These notes provide general information.  Please telephone us for specific advice.

Lloyd Davies Surveyors?

Ours is an independent firm of surveyors established in 1996 providing advice on the value and condition of residential and commercial property in the London, Surrey, Hampshire, Sussex and Kent area.

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To contact us please select from the appropriate area link below:

London | Surrey | Sussex | Hampshire | Kent

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