Lease Extensions and Property Management
Once you have owned your property for at least two years you have the right to extend your lease for an additional term of 90 years and have the rent reduced to a peppercorn (meaning you no longer pay any ground rent). The premium to be paid is calculated by a surveyor according to a strict formula which includes the value of the property, length of the current lease and the current ground rent. You do not need to actually live in the property to be entitled to extend the lease, you just need to have owned the leasehold interest for over two years.
Although there is a legal procedure you can follow to force your landlord to grant a lease extension we would advise that, in order to save costs, you initially contact your landlord on an informal basis to see whether he is prepared to extend the lease and if so whether you can agree terms. If you are able to do this we can carry out the conveyancing (dealing with the paperwork including reviewing the new lease, obtaining the permission of your lender, dealing with completion formalities and registration of the new lease). For a quote for conveyancing only please complete the online lease extension request form.
If you are unable to agree terms with your landlord you will need to serve a formal Notice of Claim (known as a Section 42 Notice) on your landlord pursuant to the Leasehold Reform, Housing and Urban Development Act 1993. Your landlord must then reply within two months. Either terms will be agreed or if not the Property Tribunal will be asked to will decide the terms under which the lease extension can be granted. Click here for Further details on this procedure.
It is important to note that you will need to budget for the landlord’s reasonable costs in investigation of title, valuation and conveyancing for which you will be responsible.
If you have not owned your property for at least the last two years then you will not qualify for a lease extension. However, this does not necessarily mean that you cannot extend the term of your lease as you maybe able to agree with your landlord a lease extension on a voluntary basis.