Lease extensions
If you own a flat, an apartment or a maisonette, that is part of larger premises, then you will have a leasehold interest. Your leasehold interest will be derived from a lease. The defining feature of a leasehold interest, as opposed to a freehold interest, is that it is for a set period of time, called the term.
The term of a lease is critical when it comes to working out the value of your property or selling it. If the term is too short someone interested in buying your property may not be able to get a mortgage, because the lease will not be acceptable security. This restricts the market to cash buyers, and depresses the market value of your property.
To be fully marketable the remaining period of the term (called the residue) needs to be well in excess of 80 years. Otherwise, when you come to sell your property you may find that your buyer can only proceed if you extend your lease. If you want to use your property as security for a loan, perhaps to re-mortgage your property or take out a home equity release plan, your lender may require that you extend your lease.
Benefits of instructing Julie West Solicitors
We are property specialists and we have years of experience of dealing with lease extensions. If you have a shortish lease consider getting a solicitor on board from the moment you start thinking about extending your lease or moving.
A good solicitor will help you weigh up the pros and cons of any deals offered by your landlord. We often come across cases where leaseholders are in danger of being outwitted, persuaded by their landlord to agree unfavourable terms. Landlords are likely to be more knowledgeable and have wider experience of concluding lease extensions; leaseholders need independent professional legal and valuation advice to redress the balance.
Instead of doing a private deal with your landlord you may be better off exercising your statutory right to extend your lease. Our solicitors can advise on whether you are eligible to claim a statutory lease extension and will explain the process from start to finish.
There may be a bigger picture to consider. Some leaseholders have a share of the freehold, and so are in a position to grant their own lease extension, often choosing to waive the premium that would otherwise be paid to extend. We may be asked to act for both sides in such a case.
Any leaseholders that also part own the freehold, will need to consider the impact on others in the building. Having allowed one leaseholder to extend without paying a premium, will the same terms be offered to other leaseholders at a later date? A cash injection from granting a lease extension could provide a welcome boost to the maintenance fund, or simply a cash windfall to any leaseholders that have bought into the freehold. Our solicitors can help leaseholders to assess their legal rights and obligations, and agree terms. Our solicitors can then implement terms that have been amicably agreed.
Julie West Solicitors offers independent legal advice, and this means your interests come first. Extending your lease isn’t for everyone. If you plan to live out your days in your leasehold property without ever needing to sell or mortgage then a diminishing term may not be a concern, unless perhaps you want to leave things tidy for your beneficiaries. We can help you weigh up the cost and time involved in extending your lease against the benefit and work out what’s best for you.
Our team of property solicitors
How it works
If you’re a leaseholder the first step is usually to get valuation advice on the premium your landlord is likely to ask you to pay to extend your lease. We also investigate and advise on whether you have a legal right to extend your lease. Armed with this information you can apply to your landlord for a lease extension. Once terms are agreed, sometimes with help from your valuer, the documents can be prepared, fine-tuned, and concluded. Your lender will also be brought in to sign the documents.
Voluntary or statutory route
Where the parties involved agree terms privately they themselves control the rate of progress. On the other hand, if you exercise your legal right to extend your lease there is a strict timetable for completing the various stages, similar to that involved on the purchase of a property. This includes paying the landlord a deposit equal to ten per cent of the premium at the point the deal becomes legally binding.
Sometimes the opportunity is taken to modernise the terms of the existing lease. Any provisions for payment of ground rent are also likely to come under close scrutiny. Ground rent is eliminated altogether if you extend your lease using the statutory procedure. You are likely to be required to pay the landlord’s legal and valuation costs in addition to your own, at completion. Your solicitor will be a specialist able to look at your lease from every angle and provide additional advice where needed.
Sale and lease extension
If you are coordinating the lease extension with the sale of your property it will usually complete at the same time as your sale, using the sale proceeds to pay the landlord. This makes it possible for your buyer to get a mortgage. Alternatively, if your buyer is not dependent on mortgage finance and you have exercised the right to claim a lease extension, this right can be assigned to the buyer, leaving the buyer to complete the lease extension following the purchase of your property at a below market price that reflects the need to incur the additional cost of extending the lease in due course.
Completion
All transactions involving leasehold properties involve coordinating third parties, estate agents, the landlord, managing agents etc. We are a firm of proactive solicitors who actually listen to you and go the extra mile to make sure issues are dealt with as quickly as possible. Our clients appreciate our focus on proactivity because it makes a huge difference to the pace and your experience of the transaction.
Registration
Following completion we will register your lease extension at Land Registry. Your old title will be closed and a new title number allocated. We will check this carefully on your behalf and provide you with copies of the updated title documents as soon as they are available.
Timescale
A lease extension can take from 3 months to 3 years, depending on how long it takes to agree terms, source funding and settle the documentation. Where the landlord is experienced and well advised the transaction is more likely to proceed smoothly than not. Six months from start to finish is probably about average.
We recommend you allow plenty of time for negotiations to run their course. If you are constrained by timescales imposed on related transactions, such as a linked sale or purchase, you may find yourself in a tight corner, forced to accept less than favourable terms. This is why we suggest you consult a solicitor at an early stage.
You can help us by dealing with issues and providing information promptly, but the overall timescale is likely to be largely out of your control unless that is, you are claiming a statutory lease extension, in which case if delays are down to the landlord, you can invoke the provisions of the Leasehold Reform Housing and Urban Development Act and ask the property tribunal to intervene.
Time and again our clients tell us that they really appreciate our solicitors giving realistic timescales from the outset and open and honest updates on progress throughout. We always make sure you know exactly what is going on and will do our best to proactively achieve progress on your behalf.
Cost
Our fees are a realistic price for doing a proper job. If we encounter complications that involve additional work and cost, we will advise you and seek your instructions.
The costs involved in extending your lease are best viewed as an investment, because ultimately our work on your behalf will maintain and enhance the value of your property. As your property is likely to be one of, if not the most, valuable asset you own it really doesn’t pay to skimp on legal costs.
Fee list
Notes
Additional advice or drafting will be charged at an hourly rate of £350 plus VAT.
First-tier Tribunal applications must be made before the end of six months following service of counter-notice, or the claim is deemed withdrawn.
First-tier Tribunal applications and hearings are only advised when the difference between the valuations is significant and the gain would warrant the potential costs. Our fee above does not include cost of presenting your case, which will require a barrister and may require your valuer.
Included in our fees
All retainers include:
A review of your current lease, and where available, consideration of comparable lease extensions.
A meeting to talk through all the issues unique to your property and circumstances.
Advice from a specialist solicitor tailored to your needs and delivered in a friendly and straightforward way.
Preparing and serving notice claiming lease extension, where applicable.
Approving draft documentation provided by landlord.
Preparing deed of substituted security if your property is subject to a mortgage.
Preparation and checking final signature copy documentation and witnessing service.
Arranging completing and registration at land registry.
Electronic copy of new lease for your records.
Law Society Conveyancing Quality Scheme (CQS)
Our specialist solicitors are accredited under CQS. The Law Society launched the CQS scheme to help consumers make an informed decision about who to instruct to assist them with residential property work.
The primary aim of the scheme is to help the public avoid advisers that are unregulated, uninsured and untrained. The scheme is also used as a badge of trust, relied upon by lenders as well as other accredited firms.
Achieving the CQS accreditation shows that we follow best practice procedures to meet the highest standards of technical expertise and service helping clients with property work.