Our top tips for lease extensions

1. Don’t wait – extend early

The shorter the lease, the more expensive it is to extend and the more difficult it will be to sell your flat. Leases with 80 years or less to run are subject to a technical calculation that enables the landlord to charge significantly more. So act early on a short lease to avoid this.

2. Make sure you are eligible

You must have been the registered owner of the flat for two years and the lease must be a long lease i.e., over 21 years.

3. Other costs

Once you serve notice under the process, you will be responsible for the landlord’s costs for their valuation and their legal fees. You will also have to pay your own legal and valuation costs.

4. Instructing a valuer

A valuer, usually a chartered surveyor, can prepare an initial valuation. The price payable for a lease extension (called the premium) is calculated in accordance with a statutory formula. Negotiations tend to be based on this formula and a valuation will help you negotiate with certainty and knowledge.

5. Negotiate

Try to negotiate the lease extension as it will be cheaper and quicker to do this than to  use the statutory procedure. This is of course dependant upon your landlord. However, do not forget the statutory procedure in case your landlord won't agree, as there are strict time limits to comply with.

6. Buying a flat with a short lease

Make sure the seller (if they qualify) starts the process to extend the lease and serve notice on the freeholder, otherwise you will have to wait until two years after you have been registered as the owner. The seller can transfer to you the benefit of the notice served on the to get around the two year ownership requirement. Other issues such as the premium payable by you post completion will be a matter of negotiation between buyer and seller over the sale price.

7. Take advice

Always use qualified, experienced professionals to ensure you get the extension and make your property more valuable and saleable. The process can be long, but it is worthwhile in most cases.