In our experience as lease extension and “buying freehold” solicitors, we have found that it is common knowledge that the value of a flat will be affected by how many years the lease has left to run. What may be less well known is that someone who has owned the lease for at least two years has the statutory right to apply to the landlord for an extension of 90 years to the existing lease term. Another benefit is that the extended lease will have a nil ground rent.
Whilst the right exists, the procedure and process to follow, is highly technical and subject to strict time limits. There are potential pitfalls for both the leaseholder and the landlord, which can have serious repercussions. It is important to seek specialist legal assistance from both a lawyer and an appropriately qualified valuer (usually, a chartered surveyor) when embarking on the process.
It is always a good move to extend the lease to improve the value of the property, and mortgage companies will often be prepared to lend to a flat owner who wants to extend their lease as it will provide them with better security than the existing lease.
If a flat owner does not extend their lease before selling, it may be more difficult to find a buyer if the lease is below 80 years. We can help in these circumstances by arranging to transfer the statutory right to the buyer on completion, which can avoid delaying the sale.
Buying the freehold
Where leaseholders in a block of flats are prepared to work together, it is also possible to exercise the statutory right to purchase the freehold of the building from the current freeholder or, perhaps, in circumstances where management of the block by the landlord is unsatisfactory, exercise the right to take over management.
We are experienced in acting for both leaseholders and landlords in relation to such collective actions.
Contact us now to discuss your lease extension or buying freehold requirements.