23 August 2018 by Leah Veasey

Tenants’ Tales: Miss Browne Extends Her Lease – Part 2

A series of blogs following the lives of fictitious characters designed to help explain the legal aspects of leasehold living in a fun yet educational way.Tenant's Tale

Miss Browne is all settled into her shiny new flat, the sofa has been delivered, she has enjoyed several movie nights with her pet poodle Max, without having to worry about what their housemates would like to watch, and things are generally going just swell.  “This is what it’s all about,” she thinks to herself, as she takes a swig of red wine and pets Max fondly on the head.

The next morning, she receives a call from her solicitor – just catching up, hope you are settling in, can we now speak about your lease extension?  “Oh!  I had forgotten all about that,” she says, “And I’m still not entirely clear what I signed up for! And what does this ‘enfranchisement’ word I keep hearing mean?  I’m an English teacher, and it sounds like someone made it up to me.”

“Not to worry,” says her solicitor, “I can explain it to you now, it’ll only take six or seven minutes.  Let’s start with enfranchisement – this is the area of law that I practice, day in day out.  The literal meaning is the giving of a right, and in property law, it means giving owners of flats the right to buy the freehold of their block of flats.  This might be something you want to consider further, once you are all settled in and have met the neighbours.”

Miss Browne’s solicitor goes on to explain that a lease is a depreciating asset; what this means is that, over time, your flat will lose time, and therefore value.  What starts as a 99 year lease will eventually dwindle down to nothing, and in order to avoid that happening, owners of leases are able to extend their lease.  Her solicitor explained that there are two ways to do this – firstly, the freeholder might be willing to grant an extended lease informally, secondly, an Act of parliament called the Leasehold Reform, Housing and Urban Development Act 1993 provides leaseholders with a right to extend their lease by 90 additional years, but only if they have owned their flat for at least two years.

It was this second method which Miss Browne had initiated when she purchased her flat, explained the solicitor.  The problem we had, she went onto explain is that you have not owned the flat yet for two years and the previous owner had not decided to extend the lease.  Therefore we had to arrange for the previous owner to ‘sign over” her rights to you. This is done by way of a transfer or assignment and prevents you from having to wait a further two years.

“That’s much clearer now, thank you!”  said Miss Browne, relieved that she finally understood what was going on.  “So, what happens next?”.

“Well, Miss Browne,” says her solicitor, coyly, “That is what I called to speak with you about.  When you served the Notice of Claim, it allows the freeholder a period of two months within which to reply to you with a Counter Notice.”

“Two months, well, it’s been nearly two months now, hasn’t it?”  Miss Browne asked, between swigs of her coffee.

“It has indeed, and the freeholder’s Counter Notice arrived in the post today.  They want you to pay £120,000.00 for the lease extension.”  At that, Miss Browne spat out her coffee, all over the breakfast bar.

When we next hear about Miss Browne, we will find out more about what happens after a Counter Notice is served and whether she has to pay £120,000 to the Freeholder.

 

 

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