THE
LEASEHOLD
ADVICE
CENTRE
General Information:
The
Leasehold Reform Housing and Urban Development Act 1993 (as amended)
is legislation which provides an opportunity for an additional term
of 90 years, at a peppercorn rent which is basically the same as
being rent free. The additional 90 years is plus the present
unexpired term.
It could be that you are having problems trying to sell your
flat due to the length of term remaining or maybe have a clause
which permits a significant rise in the ground rent. This could
be based as a percentage of the value of the property which
could make the Ground Rent rise to hundreds of pounds in itself
significantly effecting the value / saleability of your
property. Even if you are buying a flat with a short lease it
may be possible for the current owner (assuming they meet the
qualification requirements) to serve & register the Initial
Notice & then transfer this right to you so that you do not then
have to wait the two year period before you can apply for an
extension.
You cannot extend your lease if the landlord is a charitable
housing trust and the flat is provided as part of the charity's
functions, or if :- the building in which your flat is located
is within a cathedral precinct, or if it is owned by The
National Trust. Crown properties are also excluded;
although the Crown is not bound by the legislation the Minister
has stated to the House of Commons that the Crown will be
prepared to comply with the principles of it.
Qualification Requirements &
Eligibility;
To
be a Qualifying leaseholder you must own a ‘long lease’, and have
owned it for the past two years and not be a business or commercial
tenant. You do not need to have lived in the property for this
period, merely owned the lease for two years or more.
A ‘long lease’, by definition, is:
-
A lease of a term of years absolute in excess of 21 years when
originally granted – The present unexpired term is not
relevant;
-
A shorter lease which contains a clause providing a right of
perpetual renewal;
-
A lease terminable on death or marriage or an unknown date
(including the so-called "Prince of Wales" clauses);
-
A leaseholder having held over at the expiry of a long lease,
and the landlord has not served a notice terminating the
tenancy;
-
A shared ownership lease where the leaseholders' share is 100%
Once the Tenant's Initial Notice has been served it may be assigned
with the lease when the flat is sold. This way the present owner
(leaseholder), assuming they meet the qualification requirements
etc. can serve the notice and then sell the flat with the benefits
thereof. The purchaser will be able to proceed with the application
immediately, without having to meet the two years ownership
qualification. This can be of assistance especially where a
purchaser does not want to wait for them to become 'qualifying' and
/ or where a present short term of lease presents mortgage
difficulties.
Important Further
Information;
Although it is not a legal requirement, we would recommend you
appoint a valuer who, amongst other matters would provide the "best
and worst" case valuation, in order to best advise you the possible
outcome of the negotiations who can then also advise on the amount
of the offer to be made in the Notice and represent you at the
Leasehold Valuation Tribunal (LVT). Usually the Tribunal endeavour
to hold hearings near to where your property is located.
You
will however require a solicitor who, amongst other matters will
deal with any modifications, exclusions or additions to the existing
lease & the conveyance of the new Lease.
You
should bear in mind that;
We can prepare & serve the ‘Notice of Claim’ for you, strictly
in accordance with your instructions regarding the amount
proposed by way of premium & any amendments that may be
required. We would still provide a copy of Part 1, Chapter II of
the Act itself, together with a fully detailed & descriptive
manual detailing in simple easy to understand terms exactly what
the process is from beginning to end. We would request from you
the basic information needed for us to prepare the necessary
paperwork, which would included a copy of your lease, the amount
you propose to offer etc. Our fees for the preparation and
service of the Initial Notice Of Claim are £325 + VAT. We do not
charge an 'hourly rate' & all fees are clearly specified in
writing, are entirely 'fixed' with no extras or additions in any
way.
In addition, if you wanted us to arrange for an independent
valuation by a specialist experienced Valuer as well as
arranging for the conveyancing by a solicitor who specialised in
dealing with Leasehold Reform, then although additional charges
would naturally apply this we can do for you as well.
If the Notice of Claim were refuted, then, upon your
instructions, we may be prepared to make the application to The
Leasehold Valuation Tribunal on your behalf, although further
fees would be payable. We naturally are unable to guarantee any
application as neither being successful nor the amount of the
eventual premium that may be determined by the Tribunal. You
will be liable for the ‘reasonable’ costs of the Landlord
relative to the Notice of Claim & the preparation / completion
of the new lease together of course with the fees of any valuer,
solicitors etc. who you choose to instruct to assist. Please
ensure you carefully read our
Terms & Conditions to
which this website & our services are subject
You
will be liable for the ‘reasonable’ costs of the Landlord relative
to the Notice of Claim
