Could you increase the value of your flat?
If you own a Leasehold flat and have done so for more than two years, you are legally entitled to a Lease Extensions – A Guide – The Law under the Leasehold Reform, Housing and Urban Development Act 1993 (for guidance on the law, click here Lease Extensions – A Guide – The Procedure).
However, there are in fact two methods of obtaining a Lease extension and increasing the value of your asset; you can either pursue the statutory method, as detailed above (via the procedure detailed here) or enter into negotiations with your landlord direct. Lease extensions are advisable to obtain as soon as possible as, if the length of the term remaining on your Lease goes below 80 years, the cost of any premium chargeable by the Landlord will be significantly more expensive.
The benefit of entering into direct negotiations are that you may be able to obtain a lease extension both without waiting the requisite statutory period and for a longer term. In addition, it can take less time than the prescribed timescales to be adhered to in the statutory procedure.
You will still be required to pay a premium to your Landlord (based on the market value of the property and the current remaining length of the Lease) and you will need to take a Surveyor’s advice in this regard (preferably before approaching your Landlord to negotiate). In addition, if you have a lender, we will need to ensure that we obtain their consent to the lease extension. This would of course likely be a welcome cash injection for any Landlord in this current climate and may even increase the value of a Landlord’s freehold, depending upon the ground rent terms agreed.
This current period of uncertainty could provide the perfect opportunity for sensible negotiations between landlords and tenants to reach mutually beneficial terms for lease extensions; providing comfort to Tenants that their asset will increase in value and providing Landlords with a timely boost in revenue.
If you have any queries in relation to the above or would like more information on lease extensions, please call our expert team of property lawyers on 01202 525333.