Lease Extension Valuation and Negotiations
Lease extensions are a specialist area of valuation and require knowledge and experience in order to produce a satisfactory result.
The Lease extension process
In order to extend your lease, you have two options – an informal agreement made with the freeholder of the building, and a formal extension via service and receipt of legal notices.
Informal Lease Extensions
If you decide to pursue the informal route, it is important to get a professional opinion on any figures and terms you are offered by a freeholder. We may be able to tell you fairly quickly whether you have been offered a good deal.
Formal Lease Extensions
Though the process is more protracted, we would usually recommend the formal lease extension route. You will end up with 90 additional years added to the lease, and nil ground rent.
The formal lease extension process starts with appointing a specialist solicitor and a surveyor to prepare a valuation report.
A good surveyor will provide a valuation of the fair value payable for a lease extension, and lower and upper figures indicating best and worse case scenarios. The surveyor will advise on what figure should be inserted into the notice that your solicitor will serve.
Lease Extension Negotiations
Once you have served your notice the freeholder has a set window of time in which to respond. Invariably they will serve a counter notice at a higher figure.
At this stage your surveyor will then negotiate back and forth with the freeholder or their appointed surveyor. Hopefully an agreement can be reached via negotiations, and this is the case in most instances.
If an agreement cannot be reached through negotiations the case will go to tribunal for a determination. This is a costly exercise and best avoided where possible however.
Once a figure is agreed upon, the terms of the new lease will be drawn up by your solicitor.
The value of professional advice
The lease extension process can seem unnecessarily complicated at times and requires the expertise of a good solicitor and a valuer with experience in this specialist area. Instructing a specialist surveyor can help in reaching an agreeable settlement figure (or as agreeable as it can be) and in the long run should help in saving you money.
If you would like to have an informal discussion about your lease, please do get in contact with us, we will be happy to speak with you.