Extending Leasehold Property - By: Tim Bishop

As a leaseholder of a flat you may qualify for the legal right to extend your lease. This is dependant on you having owned the flat for 2 years (not necessarily in occupation) and the original lease must have been for over 21 years. If your term is creeping closer to 75 years remaining, then you should consider a right to extend seriously.

The reason the leasehold is in need of extension is to keep the flat alive and up in the top rankings of the market. If you don't extend the lease, you know what the answer is: when the time comes to sell, you won't find it easy to find a buyer. People who are thinking about purchasing will be put off. In today's uncertain climate, most high street lenders are tightening lending criteria and are likely to be reluctant to make a loan offer on a flat with a shorter lease. So extend the lease now!

Buyers are more concerned about the length of the lease and whether the block is well managed. So, let the lease continue to drop and you are likely to have to settle for less than the real value. It will be very frustrating for you to discover that a potential buyer is willing to pay extra than is the real value for another flat; especially when it is a flat further down the road, with a longer lease.

So, having made the crucial decision to extend a lease, where do you now stand?

You have to reach an agreement with your landlord on the price of a lease extension. Usually this will entail getting a formal valuation, carried out by a qualified surveyor. It is a good idea to speak with the Royal Institution of Chartered Surveyors (RICS).

Ask your surveyor to provide you with a realistic valuation, and then ask him to give you the highest and lowest potential price for the leasehold extension. He will also give valuable advice on how much you should then offer the freeholder.

Almost certainly the freeholder will demand a higher value on the extension; that is quite usual when seeking to extend your lease.

This is where things could become difficult. Your next step is to negotiate an agreement. If you encounter problems at this stage, the help of your two professionals will prove invaluable. The report from the chartered surveyor will greatly enhance your negotiating power in the case of continued disagreement. It will provide you with evidence should you be required to go forward to the Leasehold Valuation Tribunal. In addition, get yourself a second professional, a solicitor who specialises in extending leasehold property.

If conflict does occur then these chosen people representing you will help you address issues in a calm and impartial way, this support should help reduce stress.

About the Author

Tim Bishop is senior partner at Bonallack & Bishop. If you want to know how to extend a lease, then seek advice from a firm with significant expertise on extending leasehold property. He is responsible for all major strategic decisions, seeing himself as a businessman who owns a law firm. Tim has expanded the firm by 1000% in 12 years and has plans for its continued development.

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