Many leasehold owners are becoming aware of the need to extend the terms of the leases on their residential properties in order to retain their value and to increase their salability. Once the term of a lease falls below 70 years it will become difficult to obtain lending from an institutional mortgage lender.
All tenants who meet the qualifying criteria will be entitled to an extension to their lease term of an additional 90 years in return for paying a premium to their landlord. In order to qualify for this right a tenant will need to have been the registered owner of the property for 2 years or more.
There are two processes available to tenants in order to agree terms to extend their lease, the informal process and the formal process. The informal process will involve a direct approach and negotiation with the landlord. If an agreement is able to be reached this is usually the most time efficient option and allows flexibility in the terms agreed with the landlord.
If terms cannot be agreed with the landlord informally, a statutory notice can be served on the landlord which is known as the formal process. This will invoke a strict time table set by legislation and will bring the landlord to the table to negotiate terms.
If terms cannot be agreed with the landlord, ultimately tenants have the right to make an application to the First Tier Tribunal who will assess the facts of the case and make a determination of the correct premium which should be paid by the tenant.
The process of extending your lease can be complex and time confusing but The Head Partnership, through its experienced team, is able to guide you through this process and advice on the various steps and options involved.
For more information on lease extensions or to arrange an appointment please contact Frances Watts on 0118 920 9499.