The Leasehold Reform Housing and Urban Development Act 1993 (as amended) governs the right to an additional term of 90 years over and above your existing term, at a peppercorn rent (no ground rent).
You will not, according to the act, be able to extend your lease if:
To 'qualify' as a leaseholder you must own a 'long lease' and have been the owner during the past two years, not as a business or commercial tenant. You do not need to have occupied for this period, simply owned the lease for at least two years.
A 'long lease' is defined as:
If the Tenant's Initial Notice has been served it can be assigned with the lease when the flat is sold. This way the owner / leaseholder, if they meet the requirements etc. can serve notice and sell the flat with the benefit of the notice. The purchaser can then proceed with the application without having to wait the two years. This is of help where a purchaser will not wait to qualify or where a short term lease poses mortgage difficulties.
Recent court cases have decided that offers made in notices that cannot be justified in Valuation Terms render the notice invalid. A Professional Valuation is important not only to ensure that you know what you should pay but also to ensure you do not waste time and money.
The cost of buying a lease extension will be made up of the following:
The leaseholders also have to pay the freeholder's valuation costs and his solicitor's costs. They will also have to pay stamp duty.
The freeholder may accept the offer or respond in his counter notice with his own asking price following which the leaseholder may wish to enter into negotiations to settle the premium to be paid. If this cannot be achieved then either the leaseholder or the freeholder may make an application to the Leasehold Valuation Tribunal who will determine the price payable.
Levene Chartered Surveyors can provide advice on the price we believe should be fairly paid under the 1993 Act. The figure we can provide you with comes from our experience of acting on behalf of leaseholders and freeholders under the 1993 Act. It also comes from cases that have been brought before the Leasehold Valuation Tribunal. These cases give the prices paid for lease extensions on flats of various values and lease lengths in different areas. These sources of information help build up a picture, which we can apply to flats of all values and all lease lengths.
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