Lease extensions & enfranchisement
Enhancing your lease through extension or enfranchisement
The downside to owning a long leasehold flat or house is that it is a diminishing asset. However, as a leaseholder, you have the right to extend your lease by 90 years if you have owned the property for 2 years or more. As a landlord, you are entitled to a premium in return for extending the lease.
If your lease is less than 80 years, you may encounter problems if you decide to sell your property. Mortgage providers are wary of lending money when the security of a loan is in doubt.
An alternative to extending a lease is to purchase a share of the freehold. This is known as collective enfranchisement - when you and other leaseholders essentially take control of the property.
The Leasehold Reform Housing & Urban Development Act 1993 sets out the terms of an extension and a formula for calculating the premium. Leaseholders and landlords can also negotiate an extension on their own terms. Graves Son & Pilcher regularly advise clients who have inherited a property with a limited lease. We have a team of RICS qualified surveyors who can negotiate a valuation of the extension period. Our experience of residential block management is hugely beneficial when determining such a valuation.
Once notice has been served and the procedure for extension or enfranchisement is underway, there will be numerous demands for information. Failure to comply by strict deadlines will jeopardise the success of your application. Seeking professional help is advised, especially as leaseholders are liable for landlord’s fees from the time that the notice is served.
At Graves Son & Pilcher, we appreciate that freeholders and leaseholders are equally anxious to protect their property interests. We work for both parties, guiding you through the process, calculating the premium due and negotiating on your behalf.
Contact us for advice on extending or purchasing your lease.
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