Lease Extension Offer for Leaseholder

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    Lease Extension Offer for Leaseholder

    I have received a lease extension valuation for the leaseholder. the flat is in Watford.They are stating that currently the flat is worth £177 but with a lease extension it would be worth £195 and have offered a 125 year lease extension for £10K. The ground rent is currently £35 which they want to increase to £150, doubling every twenty five years!

    I thought they had to offer an extension at a "peppercorn rate", ie, keeping to, or close to the original ground rent?

    I'm happy to try and negotiate with them and I'/m happy to agree the ground rent addition if they reduce the lease amount by a couple of thousand.

    Also, we've installed a new kitchen, bathroom and new roof as well as clearing the garden which hadnt been touched since the 80's and wondered if this can be taken into account, especially concerning the roof which must also benefit the other two flats underneath us?

    Any suggestions as to how I might tackle this?

    thanks

    #2
    When did the term start from

    Comment


      #3
      Originally posted by sgclacy View Post
      When did the term start from
      The original lease started in 1981 and was for 99 years. Currently 70.8years on the lease.

      thanks

      Comment


        #4
        I've been sent the following advise from an online leasehold advise centre

        "Under legislation, a lease extension should be for a term of 90 years IN ADDITION to the current unexpired term & it should be at a nil ground rent."

        Interesting if thats true, I'd be due a 170 year lease with either the £35 ground rent or nothing?

        Comment


          #5
          If you proceed under the ACt you would need to serve a Section 42 Notice and in so doing you become liable for the freeholders valuation fee and certain aspects of their legal costs. The premium would be of the order of £10 - £11 k. You would get a 90 year extentsion and the rent would fall to a peppercorn. The landlords legal and valuation fee could be of the order of £1200.

          If you negotiate outside of the Act then any permuation is possible and you have to decide whether it is worthwhile or not.

          Their offer is not too far a drift and amicable negotiation must be the first step here and I would suggest with negotitaion try and get either

          £9k and the rent being £150

          or

          10K and the rent remains the same

          or

          £10.5k for 90 year ext and nil rent

          Whether you get 125 or 160 years will make no difference to your flats value

          Comment


            #6
            Statutorily (Leasehold Reform, Housing and Urban Development Act 1993) a lessee can extend the lease term by a minimum of ninety years.

            Alternatively, a lessee can extend the lease term informally with their freeholder and decide on a shorter extension.

            Take a look at the Leasehold Advisory Service website.

            Comment


              #7
              thanks to all. Will go with suggestions on negotiation

              thanks again

              Comment


                #8
                Originally posted by Barch View Post
                I have received a lease extension valuation for the leaseholder.
                Aren't you the leaseholder already?
                JEFFREY SHAW, solicitor [and Topic Expert], Nether Edge Law*
                1. Public advice is believed accurate, but I accept no legal responsibility except to direct-paying private clients.
                2. Telephone advice: see http://www.landlordzone.co.uk/forums/showthread.php?t=34638.
                3. For paid advice about conveyancing/leaseholds/L&T, contact me* and become a private client.
                4. *- Contact info: click on my name (blue-highlight link).

                Comment


                  #9
                  Originally posted by jeffrey View Post
                  Aren't you the leaseholder already?
                  Yep, I'm the leaseholder.

                  Comment


                    #10
                    No, it's not a minimum but a fixed ninety years' extension. Here's s.56(1) of the 1993 Act, with my underlining:

                    Where a qualifying tenant of a flat has under this Chapter a right to acquire a new lease of the flat and gives notice of his claim in accordance with section 42, then except as provided by this Chapter the landlord shall be bound to grant to the tenant, and the tenant shall be bound to accept:
                    (a) in substitution for the existing lease, and
                    (b) on payment of the premium payable under Schedule 13 in respect of the grant,
                    a new lease of the flat at a peppercorn rent for a term expiring 90 years after the term date of the existing lease.
                    JEFFREY SHAW, solicitor [and Topic Expert], Nether Edge Law*
                    1. Public advice is believed accurate, but I accept no legal responsibility except to direct-paying private clients.
                    2. Telephone advice: see http://www.landlordzone.co.uk/forums/showthread.php?t=34638.
                    3. For paid advice about conveyancing/leaseholds/L&T, contact me* and become a private client.
                    4. *- Contact info: click on my name (blue-highlight link).

                    Comment

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