Residential Lease extensions

Lease extensions

Owners of flats can sometimes overlook the fact that their lease has only a limited amount of time left to run. Although this should not of itself represent a cause for major alarm, it is nevertheless a well-known fact that most (if not all) mortgage lenders require leases of residential properties to be of a specific length/duration before they will consider lending money to fund the purchase of a flat. This can lead to the owner of a flat finding it very difficult to sell their property if their lease is due to expire within a certain period (even where there is still as much as 50-60 years left to expire).

Many flat owners enjoy a legal right to extend the term of their lease under a process known as ‘enfranchisement’. The owner is obliged to pay their landlord a premium/price for the lease extension, which is typically calculated via a prescribed formula (the flat owner should in this regard seek expert advice from a surveyor/valuer specialising in enfranchisement claims).

Although lease extensions are routinely sought at a point where the flat owner is selling or is about to sell their property, the time is in fact ripe for flat owners to consider making appropriate enquiries with their landlords now. This is because lease extension premiums will effectively follow property values, which are still below their 2007 peak.

At Leonard Gray we have expert advisers who can help take you through the enfranchisement process, whether you are a flat owner or a landlord. We also specialise in cases where there is a dispute regarding the flat owner’s right to request a lease extension, and where it has proven necessary for the flat owner to send formal notices to their landlord and commence court proceedings as a result.

If you are already or are likely to be affected by any of the above issues, then please contact one of our conveyancers for assistance. You can find their details here.