Provided you have a lease of originally 21 years or more in length, you are entitled to extend the term by 90 years on top of the remaining term at the date of your claim. You must have owned the leasehold interest for at least two years before making the claim. Where you are purchasing a property, the seller can assign the benefit of a notice served on a landlord, and the buyer will take an assignment of the benefit of that claim at completion.
The price paid is determined by a formula, which will be negotiated by a surveyor appointed on your behalf. It is extremely important to ensure that a claim is made before there is less than 80 years to run on your lease, because the cost of the extension will become much greater then, as you will be paying what is known as 50% of the marriage value (the additional value released by the tenant’s ability to merge the extended lease with the existing lease) to your landlord.
Leasehold enfranchisement is a complicated area of law that gives you the right to purchase the freehold of your house under the Leasehold Reform Act 1967, or under more current legislation, particularly the Leasehold Reform Housing and Urban Development Act 1993, to seek a lease extension of your flat or to collectively enfranchise and buy the freehold with others.
The Leasehold Reform, Housing and Urban Development Act 1993 brought in the right to enfranchisement on a collective basis. The Act enables leaseholders of flats with a qualifying lease to act together to buy the freehold of their building. This has been amended by the Commonhold and Leasehold Act 2002, although not all sections are yet in force.
We can advise on the tests necessary to ascertain whether the leaseholders of your building may be entitled to acquire the freehold from your landlord. We will set out the qualifying conditions and advise on the creation of an agreement between the lessees to make contributions towards the purchase price and costs, via what is known as a Participation Agreement.
We have specialist residential property and corporate lawyers to assist with this type of transaction.
There are several reasons why you may need to change a lease with a formal deed of variation. A common reason for changing a residential lease is that an error in the lease is discovered on sale. Another is that the lease may have been granted a long time ago and the term (length) no longer complies with today’s legal practice. Our residential property team is experienced in drawing up deeds of variation.