John D Wood & Co. has been undertaking leasehold reform work since the original Leasehold Reform Act 1967 and have extensive experience in this specialist area.
By extending your lease or buying your freehold you are helping to safeguard the future value of your property. This page concentrates on the lease extension of individual flats, which is the most common form of claim, forming most of our work within the department.
There are normally three reasons to serve notice sooner rather than later:
- The lease is approaching 80 years remaining (the marriage value threshold).
- The lease is becoming shorter (e.g. under 60 years, beneath usual mortgageable length, and where erosion of value accelerates).
- The property is to be offered for sale and the lease is comparatively short (this will be dependent on the local market).
What is a statutory lease extension?
The legislation entitles the lessee of a flat to a 90 year extension on top of their existing term, whilst converting their ground rent to a peppercorn. The premium payable for the lease extension is calculated in accordance with the provisions of the legislation, and is designed to compensate the landlord for the loss in their interest due to the extension. Accordingly, it incorporates the deferment of their reversion, the calculation of the ground rent income stream, and in the case of sub-80 year leases, 50% of the marriage value created by the extension. The premium will therefore be affected by the value of a property, the length of lease and the size of the ground rent.
Do you qualify?
To qualify, your ownership of the property must have been registered with the Land Registry for at least two years and the original lease term must have been at least 21 years. If you are buying a property and do not want to wait the two years before qualifying you may ask the current owner, if they qualify, to serve notice on your behalf and assign a claim to you as part of the purchase.
How do I proceed?
If you qualify, instruct us to provide valuation advice on the cost of extending the lease. If verifying the qualifying position is difficult, it may be sensible to instruct a specialist solicitor prior to obtaining valuation advice. Once you are aware of the estimated costs, a specialist solicitor will prepare the Notice of Claim which includes an Offer Price we recommend. The landlord will respond to the Notice of Claim with a Counter Notice, specifying their starting offer, at which point we will start premium negotiations on your behalf.
For further information, please see our lease extension guide, or contact us:
Alex Ingram-Hill MRICS
Telephone: 020 7802 3275
Sandra Buechel MRICS
Telephone: 020 7802 3277