I want to extend my lease
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What is the process?
- Instruct a surveyor to carry out a valuation
- Instruct a solicitor to serve a Section 42 notice
- The freeholder has a maximum of 2 months to respond with a Section 42 notice
- Instruct a surveyor to negotiate a fair and reasonable premium
- If a premium is not agreed before 6 months has passed from the Section 42 Notice, this is the latest an application to the First Tier Tribunal can be made
- Solicitors agree terms of the new lease
- Upon agreement of the terms, there is 4 months to complete the process
Whilst the Leasehold Reform Housing and Urban Development Act 1993 sets out this formal route it doesn't necessarily mean you have to use it. It can be considered that the formal route is time consuming and can take longer than if a leaseholder was to approach the freeholder on an informal basis. It is advisable that both the leaseholder and freeholder still use a surveyor and solicitor to represent them to ensure the agreement reached is fair and reasonable. If both parties are willing to be realistic you will save the cost of serving notice. It should be noted that if proceeding with the informal route the freeholder does not need to grant a lease extension and therefore it is typical they will propose terms that suit their needs, for example a new 99 or 125 years lease as opposed to 90 years on top of the current unexpired lease. Also the freeholder will look to keep or increase the current ground rent as opposed to the peppercorn a leaseholder is entitled to under the 1993 Act. It is advisable a leaseholder does not consider a new lease less than 125 years, so you do not need to go through this process again and any ground rent structure proposed should be forwarded to your surveyor for their advice.