Lease extension
What is a lease extension?
Under the Leasehold Reform (Housing and Urban Development) Act 1993 tenants of long leases are given the right to extend their leases. The right provided for by the Act is for the grant of a new lease for a term of 90 years, plus the present unexpired term, all at a peppercorn rent (that is, rent free) i.e. if you had 33 years left to run on your lease you would end up with a lease of 123 years after extension. The tenant is required to make a one off payment of money to the landlord known as a “premium” in return for the new lease. The process is initiated by the tenant serving a notice on the landlord calling on him to grant an extended lease.
Why would I want to do this?
As the number of years left on a lease decreases a lease becomes harder to sell and it may be difficult to raise a mortgage on the property. Most purchasers do not want the hassle of extending a lease themselves so will expect a substantial discount in the purchase price if they are to buy such a lease. Extending the lease makes the property more marketable.
Do I qualify?
Generally speaking you will have the right to seek to extend your lease if it was originally granted for a term of more than 21 years and you have owned the lease for 2 years (whether or not you have lived there).
If you would like to discuss your case with us please call Ash Oberoi, Claire Allan or Leigh Shapiro on 020 7553 9000