If you own a flat with a residential lease which was originally granted for over 21 years, this article is for you.
The article discusses why you may want to extend your lease (it also covers buying the freehold but I won't deal with that here).
The main reason for extending is that the shorter the time left on the lease, the less attractive the lease becomes to prospective purchasers and their lenders. This then affects the value of the lease on the open market so you will get less when you sell.
Most lenders now prefer at least 80 years to be left on the lease at the time they take their security so if your lease is getting to this magic mark or is less, you need to consider acting now. Additionally a new lease becomes more expensive when this 80 years mark has been reached.
To extend your lease you can take two routes.
The first way (and the best way in my opinion) is to issue the landlord with a Notice of Claim. In the notice, you set out what you want to pay for the extra years on the lease and then wait for the landlord to respond.
As soon as you issue the notice, you enter a legal process (also called a 'statutory process') which has specific timescales and a formal method to deal with any dispute over the price of the extension.
The second way is to agree a price with the landlord without issuing the notice. Some landlord's will set out their price to you for you to accept, others will ask you to make an offer (without the need for a notice).
This route is not regulated by law and therefore neither party has to stick to any timescale unless the landlord imposes one on you. If you can't agree to the cost of the extension, you would then need to abandon this route and serve the Notice of Claim which I referred to above.
It should be noted that you usually end up paying the landlord's legal fees for either route.
If you need any assistance with lease extensions, whether you are a landlord or tenant, please contact Angela Macready at Bury and Walkers.
(I wonder what the complaint was which is referred to at the end of the article. The link no longer works sadly).
Properties with leases under 70 years can be particularly difficult to sell, because mortgage lenders generally do not like to lend on flats with short leases, as they do not provide them with enough security.