Lease Extensions Solicitors

You can approach your landlord informally and see if he is willing to negotiate an agreed sum for the extension. If not, then you can use the formal route and serve notice of your intention to exercise your legal right to extend your lease.

To take advantage of this option, you will need to have owned the property for two years, and the property cannot be a business or subject to a commercial lease.

You are advised to have a professional valuation of the property carried out so that the price for the extension can be calculated.

The notice will need to include information about the lease as well as the terms you are proposing for the new lease, the sum you are prepared to pay and the date by which you require the landlord to respond.

If you have owned your property for two years or more, then you generally have a legal right to extend your lease under the Leasehold Reform Housing and Urban Development Act 1993. This means that the freeholder cannot usually refuse to extend the lease.

Difficulty may still arise if the landlord does not agree to the premium payable for the extension or the amount of their reasonable legal costs, which you will be required to pay. A dispute could be resolved by negotiation or mediation. If it is not, then it is open to you to ask a tribunal, namely the First Tier Property Tribunal, to hear the case and make a ruling as to the amount you should pay.

You should always try and extend your lease before it falls below 80 years remaining, as at this point, the cost can rise substantially. This is because the value of a leasehold property will drop once the lease has less than 80 years remaining. The amount you pay to extend a lease that has fallen below 80 years will be based in part on the difference between the value of the property before and after the lease is extended, known as the marriage value.

The government has announced that leasehold law will be reformed, making it possible for leaseholders to extend their lease by 990 years at zero ground rent. For some, it may be worth waiting for this to be enacted, but you should speak to a legal expert to ensure you make the right decision.

Calculating how much it will cost to extend a lease can be complicated. It will depend on the value of the property, the number of years remaining on the lease, the amount of ground rent payable, and the value of improvements you have carried out to the property. You will also need to pay additional expenses such as your legal fees, your landlord’s reasonable legal fees, the cost of a valuation and the Land Registry registration fee.

Our property team have extensive experience at extending leases and will be able to advise you of the likely cost once they have the necessary details.

Marriage value refers to the increase in value of the property once the lease has been extended. If there are more than 80 years remaining on the lease, the marriage value is held to be nil.

Once there are less than 80 years remaining, you will be required to pay half of the marriage value as well as the premium that is due for extending the lease.