The first question you need to ask is "Can I Extend My Lease?"
You can start a negotiation with your Freeholder at any point, but its best to at least be armed with an estimated Lease Extension calculation, or better yet a full lease valuation from a Chartered Surveyor.
This will let you know approximately what the premium could be should it go to a leasehold valuation tribunal (LVT) and represents your basis for negotiation.
Once you have this figure the next step is down to your relationship with the Freeholder. If you're on friendly terms you could tackle the negotiation yourself. However, valuing a Lease is a complex and technical process and it is advisable that you let Fridaysmove handle the negotiation for you.
- Make an informal offer - (lets the Freeholder know you want to extend your lease)
- Serve notice - There's no reason why you should offer the full premium. You could always chance it at a half of the surveyor-valued premium as a starting position.
- Counter offer - The freeholder could make a counter offer. Then its up to the two parties to decide a price, or escalate to a LVT.
Key things to consider
- Making a fair offer first sets the framework for future negotiations. e.g. if the premium is calculated at £21, 985 and you offer £12, 000.
- You are not obliged to tell the Freeholder what the premium was calculated at, but they are entitled to instruct a surveyor to do their own valuation.
- If it goes to LVT the leaseholder has to pay the freeholders fees.
- Consider the freeholders workload. Do they have multiple properties to manage or just the one? A full time job also? using this information you can employ the "loading" sales tactic where you make the job seem larger than it is.
- Always take professional advice.
When it comes to your initial offer its good to bear in mind that the LVT can be a lengthy process, especially if both parties have representatives involved. So you can use this to your advantage in negotiations. Most Freeholders would rather get a little less money than have to spend large amounts of time in negotiations and possibly Tribunal.
If you want help with any of the steps above, our Lease Extension specialists are only a phone call away. Speak to the team on 0330 660 0286.