Lease Extension
The firm offers lease extension valuation advice in accordance with both the Leasehold Reform Housing and Urban Development Act 1993 (as amended) and Leasehold Reform Act 1967.
This process occurs when the leaseholder of a property wishes to extend their lease, compensating the freeholder in order to increase the term.
A lease extension premium is calculated based on the diminution of the freeholder’s interest and the leaseholder’s share of marriage value (applicable for an unexpired lease term under 80 years). The key components are the long lease / freehold vacant possession value of the property, the ground rent payable and the unexpired term of the lease.
In terms of acting for both landlord and tenant, the advice extends to providing an opinion on the value of the premium to be paid for the lease extension, together with recommendation for figures to be inserted into either the section 42 or section 45 notice (to be served by a lawyer) and an acceptable settlement range as a point of reference at the point of agreeing the premium.
After service of the notice and counter notice, we offer a negotiation service, corresponding with the valuer appointed by the other party, to agree on a premium. This is done on the basis of client instructions, and negotiations can be capped in order to control costs.
If the matter is not settled by negotiation, the case will proceed to the Leasehold Valuation Tribunal for final determination. We have acted for clients at the tribunal and are aware of the timelines and documentation required. While the firm strives to avoid the added cost of the tribunal, our experience will guide the client through the process.
The lease extension process can occur on informal terms, whereby there is no need to serve notices, and no set terms for the extension. The firm also offers advice in this scenario.
In this connection, we carry out lease extension valuation advice for a number of housing associations. In these cases, we act as an independent valuer to set a premium payable for a lease extension, without any notices or negotiation, in order to reduce the cost of the process for the lessees.
We note that, as chartered surveyors, any form of legal Notices, Applications, Claims or similar should be handled by solicitors instructed.
The firm has carried out lease extension valuations for a wide range of properties in Southern England, with premiums ranging from under a thousand pounds to the millions.
