Applying to extend the lease of a flat can be a complicated procedure so you should instruct a Conveyancer or solicitor with experience in this area to assist you.
The legislation governing the right to apply for a new lease is the 1993 Leasehold Reform Act (as amended) and it is for the grant of a new lease for a term of 90 years, plus the present unexpired term, at a ‘peppercorn rent’ (i.e. rent free).
You will need to have lived at the property for a minimum of 2 years in order to be eligible to apply for a lease extension (new lease). If you are buying a property and you wish to extend the lease then you should ensure the seller serves the initial Notice on the Landlord to commence the process before you exchange contracts. The benefit of the Notice can then be assigned to you on completion. Your conveyancer will explain this to you.
It is recommended you instruct a valuer to provide you with a valuation for the premium payable. Occasionally a valuer is not instructed and an agreement is reached between the parties for the level of the premium. This is a matter for the parties to decide but a formal valuation is recommended.
It is your responsibility to pay for the landlord’s costs so you should budget for this as it is payable in addition to the premium. Once the process has begun, if you withdraw, you will be liable to pay your conveyancer’s legal costs and those of the landlord.
Identifying the Competent Landlord
The Competent Landlord is the landlord who has a sufficiently superior interest in the property and is therefore able to grant a new lease of 90 years. In most cases it will be your immediate landlord. However, if it transpires that your immediate landlord only has an unexpired term of, say, several years then you will need to serve the Notice on an intermediate landlord. Your conveyancer should obtain official copies of the title to the property, both leasehold and freehold, together with all relevant leases so the position can be properly assessed and the correct landlord identified.
The Notice that commences the lease extension process needs to be drafted by your conveyancer and served on the Landlord. The Notice must be in a specific form and will provide a date by which the Landlord must respond which must be at least two months after the date of service of the Notice. Once the Notice is received, the Landlord may request evidence of the ownership of the property which must be provided.
The Landlord may request a deposit to be paid once the initial Notice is received and this is usually 10% of the actual premium.
The Landlord will serve a Counter Notice stating whether or not they accept the Notice to extend the lease and this must be received by the date specified in the initial Notice. If the Landlord fails to serve a counter notice than you can apply for a Vesting Order from the County Court which means that the court will step in as the landlord and deal with the granting of the lease. Any such application must be submitted to the Court within 6 months of the date the counter notice should have been received.
Once the Notice has been served an application for a Unilateral Notice must be made to Land Registry to register the Notice against the property.
If the landlord cannot be found a Notice cannot be served. A Vesting Order must be applied for at the County Court which your conveyancer will explain to you.
If the Landlord is a company that has gone into receivership the Notice must be served on the Receiver. Similarly, if the Landlord becomes bankrupt then the Notice must be served on the Trustee in Bankruptcy.
Fridaysmove have extensive experience in this field and would be pleased to assist with your Lease Extension. Call us on 0800 038 6446 and get the process underway today.