How to Improve the Value of Your Lease - By: Tim Bishop

Although the current recession has led to a drop in property prices across the world, now might be the ideal moment for leaseholders of flats to consider extending that lease.

Many people do not realise that if they have owned a residential flat for two years on a long lease (such as a 99 year term), they are likely to qualify for the right to extend their lease by a further 90 years. Anyone wishing to improve the value and saleability of their flat, especially if they are thinking of selling it in the near future, should consider the following points:

1. Once the remaining term of the lease has dropped below the 90 year point, it's worth thinking about an extension. However, be warned that if the remaining term drops below 80 years, then the price of extending increases significantly.

2. Extending the term of your lease can make it much easier to sell. Currently buyers are often more concerned about the length of the lease and whether the block is well managed. In an unstable and unpredictable housing market, banks and mortgage lenders are becoming more stringent with their lending terms and may be less likely to offer a mortgage on a flat that has a short lease. Furthermore, buyers are often happy to pay a larger price for a lease with more years on it.

3. Unless you can reach agreement with your landlord on the price of a lease extension, it often advisable to get a formal valuation from a specialist surveyor early on in the process. This can give you increased negotiating power and could also be used as evidence in any application to the Leasehold Valuation Tribunal that might arise if you and the landlord are unable to agree.

4. It doesn't cost much to extend a lease that has over 80 years left on it - and much cheaper than waiting until the term drops under 80 years. In addition to legal costs, tenants must pay compensation to the landlord for the loss that they will suffer as a result of a lease extension (i.e. the difference in the value of the flat before and after the 90 year lease extension was granted) along with the landlord's reasonable costs and any valuation expenses.

Any tenants with concerns that their block is poorly managed or who thinks that their management charges are too high, might also want to consider taking the right to manage the block from their landlord.

If you're interested in learning more about how to extend your lease or taking the right to manage, make sure you contact a solicitor expert in lease extension cases.

About the Author

Tim Bishop is senior partner of Bonallack & Bishop, a firm of specialist lease extension and collective enfranchisement solicitors. Tim has led the firm's expansion, seeing it grow by 1000% in 12 years. He is responsible for major and strategic decisions and sees himself as an entrepeneur who owns a law firm.

Article Directory Source: http://www.articlerich.com/profile/Tim-Bishop/62652

Additional Articles From - Home | Reference & education | Legal