How to get a lease extension

The question of how to get a lease extension is a mystery to many people, but extending a lease could be immensely beneficial if people knew how to start the process and account for the costs involved. Therefore, this article breaks down the process step by step so that you have all the key details you need to make an informed decision moving forward.

If you have owned a property for more than two years, with a lease of more than 21 years (long lease), you can force your landlord to give you a lease extension. You can ask your landlord to extend the lease at any time.

Did you know this could give you an extra 90 years on top of your lease? That’s for a flat, while the figure for a house is 50 years, as there are different rules for different types of property. And then, once you’ve been granted an extension, you won’t have to pay any ground rent. This peppercorn land rent, for all intents and purposes, means you pay nothing.

Does this sound too good to be true? Where is the catch and what are the costs? You can look up a lease extension calculator online to get an estimate, but costs depend on several variables, including property value, length of lease, and current ground rent being paid. Also, the cost of extending a lease can double once the value of the marriage takes effect, that is, if there are less than 80 years left on the lease. If a lease is approaching 80 years, it is critical that you start the legal process immediately to avoid increased cost because the valuation date is frozen when the legal process begins.

You will need the surveyors to produce a lease extension valuation and negotiate the premium to be paid with the landlord’s representative. A lawyer will then be needed to draft a Section 42 notice of claim that will be served on the landlord. The owner can inspect the property to create his own valuation and then submit a counter offer. The lawyers then negotiate the terms of the new lease, and in the event of a dispute, either party can appeal to the First Tier Court within 6 months of the counter-notification. Terms are agreed upon, the new lease is signed, and funds are transferred.