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Lease Extensions & Enfranchisement

How to extend your property lease | Processes of property lease extension | Calculating property lease extension

RICS registered valuer willmotts lease extension

Lease Extension & Enfranchisement

Welcome to Willmotts Leasehold and Enfranchise Services, based out of our London office in Hammersmith. We have assisted countless freeholders and leaseholders with the complexities of the law set out in both the Leasehold Reform Act 1967 and the Leasehold Reform Housing & Urban Development Act 1993.

These offer the owners of leasehold houses and flats the rights to acquire extended leases or to buy the freehold.  The rules on qualification are complex and the Acts set out the methods by which valuers must calculate the price to be paid.  There is provision for the matter to be referred to a tribunal if the details cannot be agreed between the parties and we have long experience in dealing with and settling these disputes.

Please get in touch for help or advice, Simon Hanton BSc, FRICS Director | 020 8222 9915 |

Residential Lease Extensions

We have outlined how our chartered lease extension valuation surveyors can assist. Please do not hesitate to get in touch with our lease extension surveyors using the above contact details.
Please find below an overview of:

  • How to extend a lease
  • The lease extension process
  • The cost of extending a lease
  • lease extension calculation 
Our lease extension surveyors while based in London, routinely conduct work locally in West London, Prime Central London and Greater London as well as in the South East and the Midlands.

Both landlords and lessees may require a lease extension valuation surveyor to advise on how to extend a lease from the beginning of the lease extension process to the end. We have acted on countless lease extensions over the years on behalf of both landlords and lessees across a wide geographic area.

Please get in touch for help or advice, Simon Hanton BSc, FRICS Director | 020 8222 9915 | 

help with property lease extension enfranchisement

Why appoint a lease extension valuation surveyor?

The valuation for lease extension work is usually undertaken by lease extension valuation surveyors who calculate Lease Extension premiums (the cost of a lease extension is called a premium). Although there are online lease extensions calculators available they tend to understate the true cost and it is common, particularly for leases under 80 years, for there to be a range of values for depending on the facts and evidence available in each case which is not picked up by online calculators. As there is usually a fairly large range and the variation can translate to a difference of thousands of pounds, we generally do not recommend relying on lease extension calculators, particularly where there is a shorter lease (under 80 years) and the cost of extending leases is higher.

Why appoint Willmotts to assist with you lease extension?

Willmotts have a combination of expertise that makes us ideally placed to advise on lease extensions. Willmotts lease extension team benefit from:

  • Knowledge of the local property market and values with help from our residential agency team.

  • Our lease extension surveyors are all RICS registered valuers and are familiar with both the calculation, the legislation and case law.
The vast majority of our lease extension negotiations result in a settlement without the matter progressing to the First Tier Tribunal. However, where necessary we have experience of providing expert witness evidence in such instances. We have experience acting for a range of clients from single flat holders to some of the largest freeholders in the country.

How to Extend a Lease, The Lease Extension Process

The lease extension process usually follows one of two routes outlined below.

Formal Lease Extension

If you are a qualifying lessee for the purposes of the legislation you can follow the lease extension mechanism under the 1993 Leasehold Reform and Urban Development Act as amended by the Commonhold and Leasehold Reform Act 2002. There is a prescribed format which on occasion can become quite drawn out. A formal lease extension is for 90 years in addition to the term unexpired on your lease and extinguishes the ground rent.

Buying a short lease flat/ selling a short lease flat

A formal lease extension notice can be assigned to a new party with the lease. This can be useful for a lessee trying to sell a property with a short lease with the vendor serving notice and then assigning the benefit to the buyer to complete the process after the sale.

Do I qualify for a formal lease extension?

do i qualify for property home lease extension

The qualifying criteria for lessees are set out within Leasehold Reform, Housing and Urban Development Act 1993 under Part I, Chapter II, Preliminary, Section 39 a link can be found here. In any event we recommend that the services of a solicitor familiar with the lease extension process is engaged at the outset to advise as there are several nuisances and exceptions. For instance, business tenancies and instances whereby the landlord is a charitable trust may disqualify a lessee from extending their leases.

The main qualifying criteria are as follows:

  • Having been a qualifying tenant of the flat for two year (usually meaning having owned the flat for two years).

  • Own a long lease (meaning usually that the lease at its inception was over 21 years long).
As an interesting aside, the personal representatives of a party who has died can make a formal application, if the deceased for two years before his death had been a qualifying tenant.

Formal lease extension process

Once it has been determined that a lessee qualifies for a lease extension it is time to prepare to serve a Section 42 notice on the competent landlord. A competent landlord is the landlord capable of providing a 90 year extension. Most of the time it is easy to determine who the competent landlord is, but not always. It is, therefore, good practise to have a solicitor both serve the notice and ensure that the notice is served on the correct party.
Your surveyor will let you know what premium level to put in your notice for the lessee or the level to put in the counter notice if you are the landlord. It is advisable to allow your surveyor to inspect the property in question and report back before notice is served.

Once the initial notice has been served, the landlord, assuming there is not an absentee landlord, will serve a counter notice. This counter notice will either:

  • Accept your right to a new lease. The landlord may accept your terms or put forward different terms. If the parties cannot agree on a premium level or an element of the new lease the matter can be referred by either party to the tribunal.

  • Reject your right to a new lease. A reason must be given for this. There is an avenue for this to be challenged at the county court.

  • When there are less than 5 years of the lease remaining the landlord may try and reject the notice on the grounds that they intend to demolish the building and redevelop. The landlord would have to prove this in court.
There is a strict timetable that needs to be adhered to in relation to notices and when applications to court, counter notice etc. must be made. We, therefore, reiterate that a solicitor should be engaged to manage the legal side.

Informal Lease Extension

Negotiating a lease extension without formal notices being served under the Leasehold Reform and Urban Development Act 1993.

Cost of extending a lease

Professional fees

One component of the lease extension process and the cost of extending a lease is professional fees.  

Landlord lease extension cost considerations

Generally, for landlords the costs of extending a lease falls to the lessee. The landlords reasonable lease extension valuation surveyor costs are recoverable under the formal route set out in the Leasehold Reform and Urban Development Act 1993. The cost of extending a lease relating to solicitors fees for drafting the amended lease are similarly recoverable.  

When landlords enter an informal lease extension negotiation, they usually seek to recover their lease extension valuation and legal fees in a similar manner.
Lessee lease extension cost considerations    

The costs of extending a lease for the lessee routinely includes the professional fees outlined above under the ‘Landlord lease extension cost consideration’ heading. It must be noted that although the landlord’s lease extension valuation surveyor costs are to be paid by the lessee; the landlords lease extension surveyors negotiation fee is not recoverable under the legislation and should not be part of the lessee’s lease extension costs.

Please get in touch for help or advice, Simon Hanton BSc, FRICS Director | 020 8222 9915 |

Lease Extension Calculation

Property lease extension calculation

The 1993 Act sets out the basis for calculating the premium which may be summarised as follows: -

  1. The diminution in the value of the landlord’s reversionary interest in the flat as a result of the lease extension, assuming it is offered as it would have been presented at the commencement of the lease, assuming a good state of repair but without the benefit of any later improvements.
  1. The diminution in the value of any other property owned by the landlord and resulting from the grant of the said lease. 
  1. Not less than 50% of the marriage value released by the transaction.  It must be noted that the value of the existing lease is assessed to be assuming that no rights to extend exist.
  1. The lessee will also undertake to bear the Landlords proper legal and valuers cost incurred in processing the application.

The Commonhold and Leasehold Reform Act 2002 amended this provision to the extent that no marriage value is payable in connection with the extension of leases having more than 80 years to run.

Please get in touch for help or advice, Simon Hanton BSc, FRICS Director | 020 8222 9915 |

Further Lease Extension Reading

reading for lease extension or enfranchisement

If you wish to read further on this subject we recommend the following link 

LEASE is governed by a board, appointed as individuals by the Secretary of State for the Ministry of Housing, Communities & Local Government.

Alternatively for any help or advice relating to lease extension or enfranchisement questions, Please get in touch for help or advice, Simon Hanton BSc, FRICS Director | 020 8222 9915 |

What is a lease?

Why do I need a lease?

How do I extend my lease?

Why do I need to extend my lease?

What happens if I do not extend my lease?

What is Ground Rent?

What is Enfranchisement?

How do I achieve Enfranchisement?

What are the benefits of Enfranchisement?

Please get in touch for help or advice, Simon Hanton BSc, FRICS Director | 020 8222 9915 |

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