Leasehold Extensions - Avoiding Problems Ahead ?
Many people will at some point in their life reside in a flat. This is normally a first property, or within a city a more suitable way of living or a retirement flat.
Flats are commonly bought on a leasehold basis (rather than the freehold) and owners are normally in the dark as to what this means for their property rights.
A leasehold is like a long term rental contract in that you do not actually own the freehold and so, if the lease were to expire, ownership of the property would revert to the landlord and your financial investment would have no value. Obviously then, the longer the term of the lease the better.
Leaseholds are drawn up when the property is new to last for a finite period of time and in many cases this period is set at 99 years, which sounds an awfully long time. Consequently many owners simply forget about their lease on the basis that they won't be around when it does expire. Other leaseholders may just accept the inevitable as they do not know any different.
Many also probably do not realise that as time ticks away the value of any lease is slowly reducing which has an effect on the value of the property when the time comes to move on.
You will come up against purchasers whom wont even consider taking on a lease which has less than 90-95 years left on the term, not only this but often lenders will not provide mortgages on shorter leases. Consequently as time progresses so the property could become far harder to sell as well as less valuable.
Many leaseholders are probably not aware that they have the right to extend a lease and yet the 1993 Leasehold Reform Act gives them the right to extend a lease for up to a further 90 years.
Whilst extending a lease can be a complex process it is undoubtedly worthwhile for both protecting your property's value and making it simpler for you to sell and move on when you are ready to do so.
The sooner you take action the less complex it will be and the less it will cost. Taking advice from an experienced leasehold solicitor will make sure that you follow the correct process in extending your lease and will help protect your financial investment.
About the Author
Tim Bishop is senior partner at Bonallack & Bishop, a firm of Lease Extension Solicitors (http://www.enfranchisementsolicitors.co.uk ) specialising in advice on extending a lease. He is responsible for all major strategic decisions, seeing himself as a businessman who owns a law firm. Tim has expanded the firm by 1000% in 12 years and has plans for continued development.
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