Leasehold Extension - Your Most Frequently Asked Questions
Leasehold extensions for the owners of residential properties are not always straightforward. This article addresses some of the most commonly raised queries of those leaseholders wishing to extend their residential lease.
Q. What is leasehold extension?
A. If you own a property on leasehold, you have the legal right to extend the term of your lease, for an additional 90 years. In effect, you're getting a new lease, since this leasehold extension is in addition to the remainder of your current term.
Q. Why is it necessary to extend a lease?
A. Although you are not obliged to extend your lease, there are compelling reasons for doing so. The longer your lease, the more valuable your property, and the more easily you will be able to sell it, should you choose to do so. Properties held on a shorter lease are not as appealing to buyers and mortgage companies, getting a leasehold extension helps increase the value of your interest. As well as this, getting a lease extension provides you with greater security in your home even if you don't want to sell. If a lease expires, then the property reverts to the landlord, and any occupants become that landlord's tenants.
Q. Is everybody entitled to extend their lease?
A. Normally yes, however there are exceptions and qualifications to this. You qualify for the right to an extension if you satisfy the following criterial; your original lease was granted for more than 21 years and you have owned the property for more than 2 years. Note that this is a requirement of ownership, rather than residency, so you don't have to have lived in the property for that time.
Q. How much does extending leases cost?
As ever home carries a different valuation, there is no single answer to this. The calculation can be reasonably complex taking into consideration factors such as the landlord's compensation and local housing prices. If the lease term has dropped below 80 years, then you may incur an additional fee which is refered to as 'marriage value' this is calculated using the projected increase in value of the property before and after the extension is awarded. You will also need to take professional fees into account.
Q. What's the best way to obtain a leasehold extension?
A. The best course of action to take is always to seek advice from a specialist. A solicitor specialising in extending leases will be able to guide you through the legal implications, handle all the paperwork and deal with the landlord on your behalf. You should also get in touch with a specialist surveyor to give you a price for the extension - without this, you have no basis for negotiation.
Using the right help and services, getting your lease extended can be extremely beneficial.
About the Author
If you're looking for solicitors who specialise in leasehold extension, contact Bonallack and Bishop - experts in extending leases (http://www.extendingalease.co.uk ). Tim Bishop is senior partner at the firm, responsible for all major strategic decisions. He has grown the firm by 1000% in 13 years and has plans for further expansion.
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