Are you looking for a lease extension solicitor?

If you own a leasehold property, the length of your lease directly impacts its value. As the lease gets shorter, the property becomes less attractive to buyers, particularly mortgage lenders.

This is because a shorter lease means less security of tenure. Extending your lease restores and often increases the property's value, making it easier to sell or remortgage.

Our specialist lease extension solicitors at SB Lawyers will guide you through the process, ensuring you secure the best possible terms with your freeholder.

Why extend your lease?

A lease is a legal agreement that grants you the right to occupy a property for a specific period. As the lease gets shorter, its value decreases. Extending your lease offers several benefits:

• A longer lease increases the market value of your property.
• Lenders are often reluctant to offer mortgages on properties with short leases.
• A longer lease provides security and removes the worry of a rapidly depreciating asset.

Section 42 Lease Extension: Your legal right

Under Section 42 of the Leasehold Reform, Housing and Urban Development Act 1993, qualifying leaseholders have the legal right to extend their lease by 90 years (plus the remaining term of the existing lease) at a peppercorn (virtually zero) ground rent. This is known as a statutory lease extension.

Qualifying for a Section 42 Lease Extension

• You must have owned the lease for at least two years. This is a key requirement.
• The original lease must have been granted for a term of more than 21 years. Most residential leases meet this requirement.
• The property must be a residential property, not a business or commercial lease.
• The freeholder must not be in the process of taking possession of the property due to forfeiture or breach of the lease.

If you own your property through a shared ownership scheme, the rules regarding lease extensions can be more complex. You may need to staircase (purchase further shares) before being eligible for a statutory lease extension.

There are some limited circumstances where you might not qualify for a statutory lease extension, such as if a charitable housing trust owns the property or if it forms part of a larger estate.

The Lease Extension process

The lease extension process can be approached in two ways: informally (by negotiating directly with the freeholder) or formally (by serving a Section 42 notice). The statutory route (Section 42) provides greater legal protection for leaseholders. Here's a breakdown of the typical process when using a Section 42 notice:

• 1

  Valuation

Before serving a Section 42 notice, you'll need to obtain a professional valuation. This will help you determine a fair premium to offer the freeholder.

• 2

  Serving the Section 42 Notice

This is a formal legal notice served on the freeholder, stating your intention to extend your lease under the Leasehold Reform, Housing and Urban Development Act 1993. The notice must include:

• Your details as the leaseholder.
• Details of the property.
• The premium you are proposing to pay for the lease extension.
• Other relevant information as required by the Act.

The Section 42 notice must be correctly drafted and served. Any errors in the notice can invalidate it, potentially delaying the process by up to a year. This is why instructing a solicitor is highly recommended.

• 3

  Freeholder's Counter Notice

The freeholder has a set period (usually two months) to respond to your Section 42 notice with a counter-notice. In their counter-notice, they may:

• Accept your proposed premium.
• Propose a different premium.
• Dispute your right to a lease extension.

• 4

  Negotiations

Following the counter-notice, negotiations will take place between your solicitor and the freeholder's solicitor to agree on the terms of the new lease, including the premium.

• 5

  (If necessary) Referral to the Tribunal

If you cannot agree on the terms with the freeholder, you can apply to the First-tier Tribunal (Property Chamber) to determine the premium and other terms of the lease extension.

• 6

  Completion

Once the terms are agreed upon (through negotiation or a tribunal decision), the legal documentation will be finalised, and the lease extension will be completed.

How much will it cost to extend my lease?

Providing an exact cost is difficult without specific details of your property and lease. However, as a rough guide, extending a lease can range from a few thousand pounds for shorter extensions on lower-value properties to tens of thousands of pounds for longer extensions on high-value properties, especially those with short remaining leases.

Several key factors influence the cost of extending your lease:

• The shorter the remaining lease term, the more expensive it will generally be to extend. This is because the "marriage value" (the increase in value from combining the leasehold and freehold interests) becomes a factor when the lease falls below 80 years.
• The higher the value of your property, the higher the premium is likely to be.
• A higher ground rent generally results in a higher premium for the lease extension.
• Property values and therefore lease extension costs can vary depending on the location of your property.

Lease Extension Solicitor Fees

Our fees for handling the legal aspects of your lease extension are competitive and transparent. We will provide you with a detailed written quote outlining our fees and any anticipated disbursements (third-party costs). Contact us today for a personalised quote.

Why choose SB Lawyers for your lease extension?

• Specialist Expertise.
• No-Nonsense Legal Advice.
• Proactive and Efficient Service.
• Transparent and Competitive Pricing.

Protect your property investment. Contact us for a free consultation and quote.

029 2046 1480help@sblawyers.co.uk