The first stage in extending a lease is to make an offer of extension to the landlord. This involves serving the landlord with a formal section 42 Tenant’s Notice which outlines the premium being offered. Prior to making an offer, seek an accurate valuation of the leasehold property, carried out by a RICS approved lease extension valuer. This will ensure that when the landlord received the section 42 Tenant’s Notice, they will be less likely to reject the offer outright or to engage in protracted negotiations.
By making a fair and balanced offer based on the true valuation, a great deal of time can be saved in the lease extension process. It may even be possible to speak to your landlord to express your interest in extending the lease and secure an agreement in principle for a new premium, before making the formal offer. This can be beneficial due to the statutory timeframes for the landlord to respond or take specific actions; including two months to serve the section 45 counter-notice. By having a tentative agreement on the extension terms, the response time by the landlord may be reduced.
Ensure you have your finance ready
You may have your offer in place and even have it accepted, but it is critical that you have your finances in place, thereby allowing you to proceed quickly. Make sure you have included all of the lease extension costs which you will need to pay, including your legal fees, surveyor's negotiation fees, Land Registry fees, stamp duty, freeholder fees, and the lease extension premium. It is all too easy for a tenant to find themselves in a situation in which they have not arranged sufficient finance to cover all of the various costs and a higher negotiated premium. Also, consider your timings such that the availability of funding coincides with when the lease extension costs will need to be paid. By carefully planning in terms of the availability of finances, you can remove further wastage of time.
Seek professional guidance early in the extension process
One of the surest ways to encounter delays in the lease extension process is for a tenant to undertake the process on their own, without professional guidance. By not investing in the services of a lease extension Solicitor who will ensure the lease extension is carried out to the letter of the law and by using best practice, the true costs may be much greater. In some situations, if the extension process becomes protracted and contentious, the property may lose considerable value (especially if the remaining lease terms slips below 80 years).
By engaging the services of a specialist leasehold extension Solicitor, you may also reduce the chances that the matter needs to be referred as a dispute to the First-Tier Tribunal (Property Chamber). Seeking a formal dispute resolution decision can add considerable time and cost to the lease extension process (although this does have to be done within two to six months of the section 42 Tenant’s Notice being served, and the Property Chamber have 28 days to make a decision).
A lease extension solicitor will also be able to advise you of your other options, including purchasing the freehold or collect enfranchisement where applicable.
Final Words on The Length of Lease Extensions
Much can be done to ensure your leasehold extension is carried out in a timely manner. By keeping on favourable terms with your landlord, carrying out your obligations as a leaseholder in a timely and proper manner, and by making a fair offer based on an accurate valuation, you will start the extension process on the best possible footing. Engaging the services of a lease extension Solicitor is undoubtedly the next best step in arranging your extension, not least because they specialise in this often complex area of property law and understand the many nuances and complexities involved, and will, therefore, avoid them.
Doing so will allow you to focus on your occupation, family, and day to day life, confident in the knowledge that one of the most important legal transactions you will be a party to is in safe hands. The peace of mind of knowing your home (and your investment in it) will be protected, is invaluable. If you're a property owner, our landlord solicitors page may be able to help.
Guillaumes LLP Solicitors is a full-service Surrey Law firm. We have a highly experienced property law team of residential property solicitors and property dispute solicitors who can assist you with any leasehold extension matters. To make an appointment, please fill in our contact form today and a professional will be in touch.