Leasehold Enfranchisement

How can I extend my long residential lease?

Leaseholders of flats can either extend their leases via the statutory route (under the Leasehold Reform Housing & Urban Development Act 1993 (“the Act”)) provided they meet certain criteria (“the statutory route”). Or by asking the freeholder to see whether they are willing to negotiate a lease extension informally (informal route). 

Under the statutory route the freeholder and the leaseholder need to follow a set procedure and the strict timescales set out under the Act. This route offers more certainty to the freeholder as to the terms to be agreed and allows the leaseholder a means to compel the freeholder to extend their lease.

Under the informal route the leaseholder can potentially agree more flexible terms on a more timely basis.

Your lease is a depreciating asset. As the length of the lease decreases so does its value.  You will pay substantially more to extend your lease if your lease term has less than 80 years left. It is usually advantageous to you to extend before your lease reaches this limit.   You are very likely to encounter difficulties if you want to sell in the future and/or mortgage your flat if the unexpired term of your lease is less than the criteria set by most lenders. 

Please find attached a link to an article that we have prepared on this subject.

You will have to pay a premium to the landlord to grant the lease extension. We would strongly recommend obtaining a formal valuation from a specialist surveyor to assist you.  

You will also have your own solicitor’s and surveyor’s costs. You will also be responsible for paying the landlord’s reasonable legal costs and surveyor’s costs. In addition, there will be the usual costs associated with any conveyancing transaction such as:

• Stamp Duty Land Tax (depending on the premium you pay)
• Land Registry fees

The main ones are as follows – but there are some exceptions:

• the flat must be held under a long lease  – ie it was originally granted for a term of more than 21 years
• the flat must have been owned by a leaseholder for two years or more. This date starts from when you are registered as the owner at the Land Registry and not when you purchased it/moved into it

If you follow the statutory route, you can add 90 years to what is left on your existing lease. For example, if you have 85 years left on your lease you will be given a new lease of 175 years.

If you follow the informal route, you can agree any length of additional years to be added to what is left on your existing lease. 

The Act prescribes a timetable for both sides to follow, with any dispute over the terms of the new lease or the premium to be decided by the First Tier Tribunal (“FTT”). An application to the FTT must be made within six months of the landlord’s counter-notice. Failure to observe this time limit will result in your claim being withdrawn.