If you own a leasehold property, you may be aware that it loses its value as the length of the lease reduces but did you know that you, as the leaseholder, may have the right to extend your lease?
Lease extension – right to extend
If you have owned your property for more than two years, you have the right to add 90 years to the existing lease at a ‘peppercorn’ rent.
For example, if you have 50 years left on your lease, you can increase this to 140 years making your property more valuable and easier to sell.
Do I have to pay the landlord to extend my lease?
Under the Leasehold Reform Housing and urban Development Act 1993, you must pay your landlord a premium (price) to extend the lease. The premium is based on a formula set out in the 1993 Act.
What if the landlord won’t agree to a lease extension?
If you are unable to agree a lease extension with your landlord, you would need to go down the statutory route.
You will need to serve your landlord notice (the tenant’s notice) to begin the formal process.
Once you have served your landlord notice, you will have a set amount of time to complete the process. You will need to provide information and meet deadlines. If you fail to do either of these things, your application will fail.
You will be liable for your landlord’s reasonable costs whether or not you are successful. The 1993 act outlines what costs your landlord can recover.
What if other leaseholders try to buy the freehold?
If other leaseholders make a joint application to buy the freehold using the ‘collective enfranchisement’ procedure set out in the 1993 Act, you will not be able to apply to extend your lease while their application is ongoing.
How to prepare for exending your lease?
- Check you are eligible to extend your lease
- Instruct a solicitor to extend your lease
You will also need to instruct a surveyor; your solicitor may be able to recommend someone.
For more information on extending a lease in Southport, contact Debbie on 01704 532890