Tenants of leasehold property can extend their lease terms at any time, subject to qualification, by virtue of the Leasehold Reform Housing & Urban Development Act 1993. The Act sets out the qualifying criteria and the formula for valuing the price payable to the landlord for extending the lease term.
A lease extension can also be achieved outside of the Act by negotiation with the landlord.
Points to note in relation to lease extensions:
- The price increases as the number of remaining years of the term decreases
- Prices for leases with less than 80 years of the term remaining will be significantly more expensive
- Mortgage lenders will insist that a lease has a certain number of years of the term still remaining. The actual number differs from lender to lender but 80 years is not uncommon
- Extending the lease term under the Act can be a lengthy process and is not always achievable in the timeframe of selling a flat
- Negotiating an extension with the landlord to coincide with the sale can be expensive as the landlord is in a strong bargaining position
This is the collective right of tenants of residential blocks of flats, subject to qualification, to purchase the landlord’s freehold title at a time of their choosing. The tenants collectively become their own landlord.
The benefits of becoming the landlord are:
- The landlord can grant the tenants new or extended leases
- The landlord can decide to forego ground rent
- The landlord is responsible for maintaining the building and so the tenants can ensure that the building and grounds are properly maintained
- The landlord controls the service charge
However, there are certain stipulations that must be met in order to qualify:
- When the lease was first agreed it must have been granted for at least 21 years
- The participating leaseholders must own at least half of the flats
- If the building is partly non-residential, leaseholders cannot enfranchise if the non-residential element is more than 25% of the building
How our lease extension and solicitors collective enfranchisement can help you:
- Obtain a lease extension if you are selling your home to maximise the sale value
- If you are purchasing we will investigate the cost of extending the lease
- Asses your situation to see if you qualify for enfranchisement