Lease Extension Advice For Freeholders: Five Things To Consider

by Tim Bishop on January 8, 2014

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If you’re an experienced freeholder, you may well already know all about what to do when a leaseholder asks to extend their lease. But if you’re new to this whole area of law, it can get incredibly confusing. So what exactly do you need to consider when it comes to looking at a tenant’s request for a lease extension? What does the actual procedure involved and what happens if you and the lessee can’t agree on a price or any other issues to do with extending the lease? Here is a brief guide to just five of the things you need to think about when being asked to extend any lease.

1. Who Is Eligible?

Basically, if the lessee has owned the flat for more than two years [regardless of whether or not they have ever actually lived in the flat or not], they can ask for an extension to their lease (this comes under the Leasehold Reform, Housing and Urban Development Act 1993). Under the statutory route, this extension is for an additional 90 years.

2. How Is The Procedure Started?

The whole process is started when a formal Notice is served upon you as the freeholder. It should be signed by the lessee and it should also state the price which they consider to be appropriate for the cost of extending the lease (they will gather this information on advice from a surveyor). If the lease term in question has less than 80 years remaining, this will include an additional premium [ referred to as the “marriage value”].

3. Selling The Flat

If the lessee has served the Notice for the lease extension and then wants to sell the flat, the benefit of this Notice can be assigned to the buyer.

4. Fees

The lessee will be responsible for the costs incurred by the surveyor who has prepared the valuation (once the Notice has been served). As the freeholder, you can also claim reasonable solicitor’s fees for advice you have had to receive. You can request a deposit (usually 10% of the price) which has to be paid by the lessee within a fortnight of the request.

5. Negotiations

As the freeholder, you can serve a counter notice within 2 months if you wish to propose a higher price for the lease extension than what was in the original Notice. At this point, negotiations may begin between your surveyor and the lessee’s surveyor, but if terms / a price cannot be reached, then it will be taken to the Valuation Tribunal, where a price will be determined for you. Any other issues regarding the lease extension will also get referred to the Tribunal, and this could take months to reach a conclusion if agreements aren’t made quickly.

Getting Expert Lease Extension Advice

Although you may have instructed one or more firms of solicitors in the past, it is unlikely that any them will have any real experience of leasehold extension. The law and procedure involved is tricky and there are a number of traps for the unwary. It was sensible, therefore, to make sure that you get advice from one of the very small number of law firms in England and Wales who specialise in and have plenty of good experience in extending leases. So make sure to carry out some research beforehand, and choose a solicitor who plenty of experience in this area of property law.

Tim Bishop senior partner of Bonallack and Bishop – UK solicitors with a team of leasehold extension experts with 25 years of acting for both freeholders and leaseholders. For expert help with extending the lease on any flat, visit their specialist website at or call them directly on [01722] 422300.

Tim Bishop
Having qualified as a Solicitor in 1986, Tim Bishop is a legal entrepreneur who owns law firm Bonallack & Bishop. Find out why you should choose the commercial solicitors at Bonallack & Bishop: Visit
Tim Bishop

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