Obtaining a Lease Extension -

Further Information & Frequently Asked Questions

What you need to know to start....

1. You have to have owned your flat for 2 years.
2. You need to obtain a valuation from SWA Chartered Surveyors
3. You will need to identify an experienced Solicitor

please note that information provided on this site is given as a guide only and is not intended as a legal interpretation

What are the likely costs?

1. You have to pay a premium for the Lease Extension set by the local Valuation Tribunal in accordance with the Act
2. You have to pay Solicitors and Surveyors costs

How long does the process take?

The timing for the process is set down by the Act. Initially a formal notice is served to your Landlord to which he or she must respond within a fixed period. There is then a period for negotiation of terms. Finally there is a right to apply to the Valuation Tribunal on any terms which have not been agreed. The timing of the Tribunal hearing and their decision depends on workload. The whole process can take a year or more.

What are the common problems or mistakes?

1. The most common mistake is asking your Landlord for a new Lease when you are trying to sell. The costs are likely to be much higher.
2. The notice served on your Landlord must be correct. To avoid incurring unnecessary extra costs make sure your Solicitor is experienced in this specialist field.
3. As a general rule if your Landlord seems happy to extend your Lease then he is probably overcharging in some way.The amount of Ground Rent and the term of the Lease extension is laid down by Parliament.
4. The Ground Rent, the Lease term and whether the rent payable goes up during the term are ALL important and influence the value of your flat when you come to extend or when you sell. The more the ground rent and the shorter the term so the less the value of your flat when you come to sell, because it will cost more for the Lease extension.

What part does your Surveyor play?

• The Surveyor provides an initial valuation so that you can decide what financing may be necessary. During the process thereafter, SWA can provide advice on an appropriate figure to be included in the Statutory Notice.

• Once negotiations commence, SWA acts on your behalf advising on the implications of all aspects and allowing you to make decisions at arms length. In many cases the matter is successfully negotiated by the Surveyor before reaching the Tribunal stage.

• The Surveyor advises the Tribunal of the points in dispute and provides a formal valuation on behalf of the Tenant.

• At the Tribunal Hearing the Surveyor argues the Tenants case providing evidence to substantiate the case. Another expert Surveyor usually represents the Landlord and also gives evidence. The Surveyors may question each others evidence, they will also answer technical questions asked by the Tribunal Members or provide additional evidence as requested.

What Part does the Solicitor play?

• The Solicitor serves a formal notice on the Landlord amd may request any information.

• The Solicitor gathers all necessary Legal information to be submitted to the tribunal

• Once the Tribunal decision is made the Solicitor finalises the Legal process and registers the new Extended Lease title.

Can the Tenant be present at the Tribunal hearing?

Yes, Tribunals are open.

Does the Solicitor need to be at the Tribunal Hearing?

Usually not, but the Solicitor may be called upon if a dispute arises on a Legal issue or on Legal fees. SWA usually ask that the Solicitor be contactable during the respective period.

What alternatives are there?

1. You can join together with other Leaseholders in your block to purchase the freehold
2. Once you have started the Lease extension procedure by serving the appropriate notice you will be in a much stronger position to negotiate with your Landlord
3. If you have excessive charges for estate services you receive you have the right together with other Leaseholders to take over the management. This is a relatively low cost procedure. See Right to Manage

Are there any disadvantages of the Lease Extension process compared to Enfranchisement? (Enfranchisement is the purchase of the freehold collectively by 50% or more of tenants in the block)

The Lease extension process incurs costs to a single Leaseholder, many of which are shared with other Leaseholders in the Enfranchisement process.

Freehold purchase also gives collective control over the estate management.

Are there advantages of the Lease Extension process over Enfranchisement?

Although most tenants may eventually take part in the Freehold purchase process, in the first instance a small number of people may be responsible for getting the ball rolling. The process is much quicker to get going for a Lease extension as there is only one party involved in decisions.

In Enfranchisement those tenants who participate also have to purchase the Landlords interest in the part of the freehold that is still Leased to those who don't. The purchase also includes any additional value which might be attributable to the Land.

More information on Leasehold Ownership and Enfranchisement can be obtained by reference to LEASE

Why SWA Chartered Surveyors?

When the matter reaches Tribunal stage your case is represented by your surveyor so it is therefore important that your Surveyor has experience and success at Tribunals

SWA specialise in this type of work and has successfully represented Clients in negotiations with Landlords and at Tribunal.

What should you do next?

Click E-mail us on the left hand side panel of this page or Email: lease@swa-surveyors.com with details of your flat to obtain a quotation for a valuation.

What is a 'peppercorn'?

A 'peppercorn' is the minimum value allowed by Common Law for rent payable under a Lease. It is as near as possible to zero