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Lease Extension: Statutory rights

Lease Extension: Statutory rights. Nadeem Hussain Islington Leaseholder event 10 th October 2012. Why extend the lease?. Value and marketability diminishes over time Enhance attraction to mortgage lenders Avoid marriage value 80 years rule Freehold purchase may not be possible

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Lease Extension: Statutory rights

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  1. Lease Extension: Statutory rights Nadeem Hussain Islington Leaseholder event 10th October 2012

  2. www.lease-advice.org Why extend the lease? • Value and marketability diminishes over time • Enhance attraction to mortgage lenders • Avoid marriage value • 80 years rule • Freehold purchase may not be possible • One flat in building • Resident landlord • Commercial area is more than 25% • Takes too long

  3. www.lease-advice.org Lease Extension • Introduced by Leasehold Reform Housing and Urban Development Act 1993 as amended by Commonhold and Leasehold Reform Act 2002 Act • The right to a new lease of 90 years plus the existing term at a peppercorn ground rent • Price including capitalised ground rent, deferred reversion and marriage value if less than 80 years left on lease

  4. www.lease-advice.org Qualifying tenants • Must have owned flat for 2 years • Removal of residence test • Considered that tenant must be registered proprietor of the lease at HM Land Registry for at least 2 years • Lease must have been in excess of 21 years when originally granted

  5. www.lease-advice.org Procedure • Prudent to obtain a valuation • Serve Tenants’ Notice on landlord • Landlord to respond with a counter-notice • Application to LVT within 6 months from date of Counter-notice

  6. www.lease-advice.org Serve notice (s42) • Specify a premium • Specify terms of new lease • Personal signature of lessee(s) • Give landlord not less than two months to serve counter-notice NB Can transfer benefit of notice when selling flat

  7. www.lease-advice.org Landlord’s rights • Can request a deposit • The greater of £250 or 10% or premium proposed • Right of access • To the flat to obtain valuation • Enforceable through application to the county court

  8. www.lease-advice.org Counter notice (s45) • Admit the claim • Deny the claim • landlord to apply to the county court within two months of giving counter-notice • Redevelopment rights • last five years of the term • What if landlord fails to serve counter-notice in time? • leaseholder to seek vesting order in the county court.

  9. www.lease-advice.org Procedure post – counter-notice • Negotiation • Between two and six months after counter-notice given either party can apply to LVT to decide disputed terms • Failure to apply • deemed withdrawal • cannot apply for another twelve months and pay landlord’s abortive costs • Once terms agreed or decided by LVT move towards completing the new lease within two months(“appropriate period”) • If fail to enter into binding lease within the appropriate period another two months to seek vesting order in the county court otherwise deemed withdrawal

  10. www.lease-advice.org Questions? The Leasehold Advisory Service 020 7383 9800 info@lease-advice.org www.lease-advice.org Maple House, 149 Tottenham Court Road London W1T 7BN

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