Achieving a lease extension on your flat can significantly add to its value. However if you’re considering lease extension, be sure that you don’t make any of the following mistakes.
If you are in the process of selling your property, make sure that your agent knows that you are applying for an extension. Extending your lease will add significant appeal and value to the sale.
Seek legal help and advice when drafting your statutory notice to extend. The legal process for leasehold extensions is fairly strict. Taking advice from an experienced lease extension solicitor will mean that you meet all your deadlines, and will also encourage your landlord to follow the statutory requirements in his responses.
Ask your solicitor for a reasonable quote for the transaction and when budgeting, be aware that you will most likely be responsible for paying your landlords legal costs as well as your own. However rest assured that your landlord does need to make sure that his/her legal costs are reasonable – failing which you can always challenge those costs at a Leasehold Valuation Tribunal.
A landlord offering a lease extension for a ridiculously high premium obviously wants to discourage you from extending your leasehold agreement. Try to find out the landlords reasoning behind his/her actions and attempt to negotiate on these points. If this does not work, you should remember that if you qualify (as above) then the Leasehold Reform Act 1993 legally entitles you to a lease extension. This basically means that, should you be faced with a worst case scenario, you can take your landlord to a Leasehold Valuation Tribunal and thus force him to give you an extension at the market rate. It is also worth noting that a tenant can bring a claim under s.20(c) of the Landlord and Tenant Act (1985) which states that the landlord is not allowed to claim back any legal costs he incurs during the process.
If the landlord finds out that you want to sell the property and therefore ‘need’ a leasehold extension, this could encourage him/her to ask for a higher premium. Try to keep your intentions private to ensure that you get a fair deal.
Occasionally you have an absentee landlord and so he can’t be contacted via the traditional notice procedure. If this happens, you will have to go to the county court and apply for a vesting order. If you meet all the criteria for a leasehold extension, the county court will normally grant the extension in your favour. The court will refer your case back to the Leasehold Valuation Tribunal so that they can work out the amount of premium that you must pay to the absent landlord.