What is it?
This is the right to extend your residential flat lease by 90 years on top of the unexpired term of your existing Lease. The new Lease will be at a peppercorn rent (e.g. no ground rent is payable) and will generally be on the same terms as the existing lease.
Do you qualify?
To qualify for this right, you must have been the registered owner of the flat at the Land Registry for at least two years and the original term of your lease must be in excess of 21 years.
There are a number of exclusions that will prevent you from exercising this right such as your Landlord being a charitable housing trust. You should therefore contact us to assess your own individual eligibility.
Following confirmation of your eligibility, you must ascertain the premium payable to the Landlord in return for granting the extension.
The premium payable is made up of the following:
- The amount by which the open market value of the Landlord’s interest is reduced by granting the extension.
- The marriage value – this is the increase in value of the property following the grant of the extension. This is only payable where the unexpired term is for 80 years or less.
Whilst we are not able to provide this valuation information, we can recommend Surveyors who are experts in this field.
Why should I extend my Lease?
As the length of your Lease decreases, so does the value.
If your Lease has an unexpired term of less than 80 years, your flat will likely be unmortgageable therefore greatly reducing its marketability.
Accordingly, it is advisable to begin this process before you reach this point and ideally with 85 years left to run.
How much will it cost?
As mentioned above, you will have to pay a premium to the Landlord in return for granting the extension.
Following initiation of the extension process, the Landlord can also request you pay a 10% deposit of the premium or £250.00 on top of their reasonable costs incurred in relation to investigating your eligibility, valuing your flat and negotiating and granting the new Lease.
You will also be liable for your own professional costs, such as legal and Surveyor fees.
If there is a dispute, the matter must be referred to the First Tier Tribunal and you can expect costs to be much higher than an undisputed extension.
What if my Landlord is missing?
If you have made all reasonable efforts to locate the Landlord without success, an application to the Courts could be made for a “Vesting Order”.
If the Courts are satisfied that the Landlord is missing and you are eligible for the extension, they will grant the Order.
How long will it take?
The average time it takes from initiation to completion of the extension is six to nine months. If the extension is disputed, it can take over 12 months.
Why choose Linder Myers?
Linder Myers has been providing expert advice to both Landlords and Tenants in respect of this niche practice area for a number of years. We understand all aspects and strive to ensure the process is dealt with efficiently whilst providing a personal, bespoke service, tailored to meet your needs.Find out more about our Residential Conveyancing department