The short answer is yes, it is often possible to extend a lease fairly rapidly but not overnight. Care and caution should be exercised before approaching a freeholder to extend your lease, however tempting and/or important it is to seek to extend quickly.
If you need to extend your lease, we are highly experienced in getting the optimal result as quickly as possible and as cost effectively as possible. Please do call or email for a conversation and fee information.
A common scenario is for flat owners with long leasehold interests to find out they need to extend their leases when thinking about selling.
The problem with this is that delay is the enemy of being able to get a property sale through and this, in turn, gives a freeholder an opportunity to try and extract concessions. The formal lease extension process takes time. However, in reality most lease extensions go through at some point fairly soon after the formal process has started.
Tips for informal lease extensions
The upshot of the above and good advice for owners of converted flats or residential long leaseholders in larger blocks is to :-
- Check your lease now – don’t wait to extend until you are thinking of selling.
- Understand that an informal lease extension doesn’t mean a verbal agreement or chat with the freeholder. In most cases you will need to start the formal process.
- If you are trying to keep costs down, which is a good idea, it’s possible you might be able to avoid some legal and valuation fees if you have a good idea what the likely extension premium should be, but you will not be able to avoid all fees. Formalities are necessary including technically varying the existing lease and Land Registry fees.
- Unless the freeholder is your friend, a relative, you own a share of the freehold already, you may find that to get the extension through quickly and without the formal statutory process or at an early stage of it, the freeholder may seek concessions from you. He/she/they may seek to increase the ground rent or make other demands.
So, in reality an informal lease extension typically does not mean no use of the statutory process to force through the extension but usually means that the best and most common solution, for either leaseholder or freeholder, is to not have the extension completed only after the entire formal process (the statutory process) has been followed. This is generally not in the freeholders interests because :-
- Notwithstanding high property prices, the typical premium for extending a lease, due to the statutory formula used, will be within relatively narrow parameters, so a freeholder cannot pick just pick a ridiculously high figure and hold out for it;
- If the freeholder is unreasonable and refuses a realistic premium offer made and contests this under the statutory process but gets awarded less, the freeholder may end paying the legal costs incurred by both sides.
As a flat owner, even if your goal is speed and keeping costs down when seeking to extend your lease, you should always get good advice. Plucking a figure out of the air to make an informal approach to your freeholder has many dangers. Any offer should be submitted with suitable protections and formality in place and based on a clear idea of the likely premium a Valuation Tribunal might award.