Extending a lease on your property
If you own a leasehold flat, you need to keep a close eye on the number of years remaining on the lease. If you let it go too low, it may become difficult to sell your property.
If you are thinking of selling in the near future, you should check the length of your lease.
Once the remaining term of the lease has dropped below 90 years, it is worth considering a leasehold extension.
Usually if a lease has less than 90 years left to run, it should be extended, to avoid a drop in valuation and so as not to deter or limit potential buyers. It can be more difficult to obtain a mortgage on properties with leases shorter than 90 years, which may restrict your potential pool of buyers to cash buyers only. Purchasers are often willing to pay more for a longer lease.
Leases with less than 80 years to run become much more expensive to extend and those with less than 60 years even more so.
The key point is to take action well before the time remaining on the lease drops below 80 years.
What is a leasehold property?
Leasehold properties are sold under a legal agreement (a lease) which transfers ownership from the landlord (freeholder) to the leaseholder for a set period of time (often 99 years - or even up to 999 years).
Leaseholders are liable to pay an annual ground rent to the freeholder and may be subject to various restrictions (e.g. requiring freeholders consent before carrying out any major works to the property).
Can I extend my lease?
As a leaseholder, the law gives you the right to extend a lease if:
• the original lease was granted for over 21 years,
• the lease is for residential use and
• you have owned the flat for a minimum of 2 years. (You do not have to have been in occupation during these 2 years of ownership.)
Even if you meet these 3 criteria, you will not be a qualifying leaseholder if the landlord is a charitable housing trust and your flat is provided as part of the charity’s work.
How do I extend my lease?
You should seek advice from a solicitor at the outset. We have experience in this area of work and can help ensure that you do not pay over the odds.
If you are planning to sell soon – act now!
It is easy to forget about leases and leave it to late too late to extend at a reasonable cost. When you come to sell your flat, if your lease is getting short, it will be harder to sell.
A lease extension process may be completed in a couple of months, but it is not unusual for it to take 6 to 8 months. It is best to sort out the extension in advance of putting your property on the market.
If you are considering a lease extension call our team today on 01827 317070 for further information and a quotation on legal costs or email lfriel@pickerings-solicitors.com
