Looking to Extend your Lease or Buy the Freehold?
Landlords (Freeholders)….Your leaseholders have the right to extend or purchase their lease. You must respond with a formal landlord’s counter-notice within the specified timescale, (normally two months), or you will be forced to grant the lease extension or sell the freehold at the price set out in the tenant’s notice.
How much will a Lease Extension or Leasehold Enfranchisement cost?
The amount a leaseholder should pay to extend or buy their lease is assessed in four main parts:
- the value of the ground rent income
- the value of the freeholder’s reversion at the end of the lease
- 50% of the ‘marriage value’ i.e. the amount that the value of the flat increases when the lease is extended. This sum is not payable if the existing lease has more than 80 years unexpired.
- any other specific considerations applicable to the property.
In calculating the final cost there are other considerations such as the development value. An experienced Chartered Surveyor will be able to take into account all of the relevant factors to determine the Market Value.
In addition to the cost of the lease extension or purchase and their own professional costs, the leaseholder must pay the freeholder’s legal costs, valuation costs and any Stamp Duty.
*If an agreement is not reached on value, the leaseholder must be in possession of a formal RICS valuation in order to be represented at a specialist court known as the First-Tier Tribunal. Calculations arrived at from any other source (such as online calculators) will not be considered.
- Needing to extend your lease?
- Wishing to buy your freehold?
- A freeholder that has been served notice of a leasehold enfranchisement by your tenant?
Speak to one of our friendly experts now. Not only will you benefit from our many years of experience in this area, you could also make substantial cost savings.
Contact Rob Hurlstone at our Fareham office on 01329 221199.
For Isle of Wight enquiries please contact David Wiggins on 01983 821212.
Download our guide to lease extensions and leaseholder enfranchisement here