Lease Renewals/ Extensions
We have two main types of property in this country – freehold and leasehold. When you buy a freehold property, you own the land and the building outright, and you can do what you please with the property, subject to local planning and other regulations. When you buy a leasehold property, you are effectively renting the property and the land from the person or company that owns the freehold. In many cases, the lease may be for 100 years or more and so you act as the owner of the property. Some leases are for 125 years or much more. The longer the lease, the less you have to worry about expiry of the lease or your title to the property.
Dealing with a Short Lease
However, there are properties where the leases are quite short, and this often makes them unmarketable and you may have to consider extending the lease. The right to request a lease extension generally starts once you have owned the property for two years. If you are looking to sell a property which has a relatively short lease, you may want to consider a lease extension, which can make a material difference on the price you can achieve on the sale. Where there is a short lease, a potential buyer will often not be able to raise a mortgage against it and this reduces the number of people who could buy the property.
Lease Renewal & Extension
In order to extend your lease, you will need to pay your freeholder a premium to extend the lease. Our Litigation Team, in conjunction with a specialist surveyor, can assist you in negotiating the premium and serving the correct notice on the freeholder. If it is not possible to reach agreement about the level of premium, you can issue a Court application and our Litigation Team can deal with this on your behalf.
The deadlines for serving notices are very strict. If one of these deadlines is missed, you will have to wait 12 months before you can re-start the process, during which time the premium you must pay may increase. It is therefore essential that you speak to our expert Litigation Team at the earliest opportunity. Our Litigation Team work in conjunction with our Conveyancing Team, and once the premium has been agreed, we will deal with the drafting of the new lease and registration at the Land Registry.