Frequently Asked Leasehold Questions

—You must be the registered Leaseholder (known as a tenant) of the flat for two years before the date of the claim

— You do not need to be an occupier of the flat

— You must hold a lease that had a fixed term of more than 21 years when it was originally granted

— Personal representatives of a deceased tenant can make a claim provided that the right is exercised within a period of two years from the date of grant of probate

— The assignee of a tenant’s notice served by a tenant who has for the previous two years been a qualifying tenant of the flat also qualifies

— There is no limit to the number of flats you may own in the building

— You may extend any or all of them

— You cannot be a qualifying tenant if you hold a business lease, lease from a charitable trust, or a sublease that breaches the terms of a superior lease.

A lease can be extended at any time, however if your lease is approaching 80 years, you should consider extending as soon as possible.

If you have a short lease, for every year that passes the premium to extend will increase. Letting a lease run below 80 years also brings into consideration the marriage value, which will dramatically increase your costs.

Marriage value is the increase in the value of the property once the lease has been extended, usually 50% of this amount is payable to the landlord. This would be added to the cost of extending the lease if it falls below 80 years.

If your lease is between 80 to 100 years, you should consider extending it as the cost to extend before it becomes a short lease will be more favourable.

— You will be entitled to acquire a newly extended lease in substitution for your existing lease

— The extended lease will be for a term expiring 90 years after the end of the current lease

— Your rent for your extended lease will be zero or you will not pay any rent on your new extended lease.

— Broadly, the lease will otherwise be on the same terms as the existing lease.

Item deThe price or premium to be paid for the new lease will be the aggregate of:

— The diminution in value of the landlord’s interest in the flat, consequent on the grant of the extended lease; being the

— The capitalised value of the landlord’s ground rent. The value of the landlord’s reversion (this is the near-freehold vacant possession value today, deferred for the unexpired lease term)

— 50% of the marriage value (the additional value released by the tenant’s ability to merge the extended lease with the existing lease) must be paid to the landlord, although the marriage value will be deemed to be nil if the existing lease has an unexpired term of more than 80 years at the date of the claim;

— Compensation for loss in value of other property owned by the freeholder, including development value. In addition to the price and the tenant’s own legal costs and valuation fees, you will also be required to reimburse the freeholder for their legal costs and valuation fees.

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In many cases, extending a lease involves legal documentation and negotiations with the landlord or freeholder, which can be complex and require legal expertise.

Extending a lease often involves negotiations with the landlord or freeholder regarding terms such as lease length, ground rent, and any other conditions. A solicitor can represent your interests and negotiate on your behalf.

Extending a lease typically involves drafting legal documents such as a lease extension agreement. A solicitor can ensure that these documents accurately reflect the terms agreed upon and protect your rights.

A solicitor can also provide you with legal advice regarding your rights and obligations under the lease, as well as any potential implications of extending the lease.

Item— At the outset of the process, it is important that you instruct a properly qualified surveyor and solicitor with experience in the field of enfranchisement

— If necessary, your solicitor may serve a preliminary notice to obtain information from the Landlord

— Your surveyor will inspect the flat and undertake a valuation in order to determine the premium payable

— Thereafter, your solicitor serves the tenants’ notice of claim

— The landlord is likely to respond with a procedural notice requiring payment of a deposit (equal to 10% of the premium being offered) and asking the tenant to deduce title

— The landlord will instruct his surveyor to inspect the flat and undertake a valuation in order to determine the Premium on behalf of the freeholder

— Within the period specified in the tenant’s notice, the landlord must serve his counter-notice. First and foremost, this must state whether or not the claim is admitted

— If the claim is admitted, then the counter-notice must state, amongst other things: which of the proposals contained in the tenant’s notice are acceptable or not and the landlord’s counter-proposals — particularly the premium

— Once the counter-notice is received, both sides’ surveyors will aim to negotiate a settlement for the premium, which is agreeable to both leaseholders and freeholder

— If any terms of acquisition (including the price) remain in dispute after two months following the date of the counter-notice, then either party can apply to the First Tier Tribunal for the matter in dispute to be determined.

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A surveyor ( Olden Property) will determine how much the price (premium) should be for you to extend your lease.

A valuation will let you know if you can realistically afford the lease extension before beginning the process of any negotiations.

The freeholder may also wish to have their own valuation, which will be at your cost. They do not need to disclose the valuation amount so, having your own will help you make sure you are paying the correct price.

If you enter the six-month statutory negotiation, Olden Property can conduct the price negotiation on your behalf. As the valuer, we are best placed to do this successfully.

The method of valuation depends on the type of property and the purpose of the valuation. Common valuation techniques used to establish a market value include the comparison method (comparing similar properties or a rate per square metre), income approach (capitalised current or future rental income), cost basis (based on the cost to replace or reproduce the property) or the less common profits method description

A Redbook Valuation can only be undertaken by a chartered surveyor registered with the Royal Institution of Chartered Surveyors (RICS). Olden Property is registered with RICS. Where instructed our valuations are undertaken to the requirements set out in the current edition of the RICS ‘Red Book’ valuation standards, rules and governance. Tom Olden is a chartered surveyor and registered valuer with extensive expertise, knowledge and experience, which can be tailored to your specific requirementription

It all depends on the type of valuation. Olden Property undertakes valuations of both commercial and residential property for various purposes including but not limited to market valuations, valuations for capital gains tax purposes, compulsory purchase and leasehold reform. Prices may vary depending on factors specific to each valuation assignment and the complexity of each case. Please get in touch to find out more and we will provide a quote on the same day. description