It’s Not That Urgent
If your lease has more than a hundred years to run, then you may be right and taking steps to extend it immediately maybe isn’t that urgent at all. However you do still have the right to extend by the statutory 90 years if you want to. This will increase the value of your property and will make it easier to sell too.
If there’s only 90 years remaining, you can’t put off thinking about a lease extension for any longer. Ten years can pass in the blink of an eye, and once the lease drops below the 80 year threshold, you will be landed with an additional premium to pay called the marriage value – and that’s likely to add thousands of pounds onto the price of your lease extension overnight.
The marriage value is worked out by comparing the value of your home both with and without a lease which has been extended. It also takes into account the time period where the landlord will only get a minimal rent before the lease reverts to them. If you extend your lease before it gets to that 80 year deadline, paying the marriage value can be avoided completely.
Also remember that a longer lease will make your property more valuable.
Basic Rule : Act as soon as you can to extend your lease.
It Costs Too Much
Applying to extend your lease is not free and there are most definitely costs involved. Legal costs for the services of a specialist solicitor working in lease extension are unavoidable, as are the costs associated with getting a specialist surveyor to value the right level of premium you will need to pay your freeholder. Going DIY, trying to go it alone without the help of a solicitor or surveyor could massively damage the chances of a successful lease extension application, so these sorts of costs are just something that are unavoidable.
In any event, you’re going to have to pay your freeholder’s reasonable legal and valuation costs – and neither is assay, it could be very risky simply relying on a valuation provided by your freeholder. It’s unlikely that they will be acting in your best financial interests.
On the other hand, consider the costs of doing nothing. A shrinking leasehold term will mean that the value of your property on the open market is shrinking too. Once you get below 90 years remaining on your lease you might start to notice fewer potential buyers than you may otherwise expect. Once below 80 years interest tails off even faster as buyers are put off by the marriage value fees should they want to extend the lease once they’ve bought the property.
If you’ve ignored the lease extension so long that it has dipped below 70 years, the trouble really starts. Banks generally won’t lend on properties with leases of less than 70 years [some lenders require a longer term than that and some are pulled out of lending on leasehold property entirely], so any prospective buyer a simply not be able to get a mortgage. If the situation continues with the leaseholder thinking that it is just too expensive to consider extending a lease, eventually the lease will expire. This converts the leaseholder into a tenant with far fewer rights than a leaseholder and is the worst possible end to the situation.
Basic Rule : Costs of doing nothing far outweigh the costs of extending
It’s Too Difficult and Stressful
The hardest part of the whole process of extending your lease is probably taking that first decision to start the process. If you’ve read the information above about the costs of not extending and the benefits of extending, that decision should be relatively simple.
Of course you could choose to go down the “difficult” route of lease extension by reading the Leasehold Reform, Housing and Urban Development Act 1993 (as amended) from cover to cover, follow the instructions in the Act about how to extend your lease, attempt a formal valuation to submit to your freeholder, make sure all letters and documents are worded correctly, adhere to timescales and deadlines, respond to the counter offer and negotiate with your freeholder’s solicitor and surveyor to make sure you get a great price. But there are many traps for the unwary, and a simple mistake could mean that you have to start all over again.
Or alternatively, you could put the matter in the hands of highly qualified professionals who have spent years training and getting experience in lease extension work – your specialist lease extension solicitor and your surveyor.
Although there are not many of them, these experts deal with lease extensions every day of the week, don’t find the process difficult and don’t make mistakes. We all like to challenge ourselves but navigating a complex legal process such as lease extension with absolutely no legal training or experience is far too much of a challenge for anyone.
Basic Rule – Leave the legal work to the professionals
Considering leasehold extension? For expert legal advice to rely on, call or email us now
Our experts team can help you – wherever your flat is in Salisbury or anywhere else in England or Wales.
You don’t need to come and see us in person, but you are always welcome to do so – our team regularly help people extend their leases nationwide using e-mail and over the telephone.
So if you’re thinking of a lease extension;
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