Tag Archives: faq

How do I know what premium the tenant should be paying me to extend the lease?

If a Section 42 Notice has been served, this notice will state an offer figure. This is very much the starting point in negotiations as to the price to be paid. You should take professional valuation advice on the likely ‘fair’ premium from a qualified surveyor.

You can always use a Lease Extension Calculator to determine whether the offer seems valid, however the best way to know would be to obtain professional advice.

Even if you are involved in an informal discussion that will lead the grant of a new lease, you should ask the tenant to pay your costs in obtaining valuation advice so that a figure can be offered to the tenant and/or put to the tenant in informal negotiations.  As the statutory process requires that your costs are covered under Section 60 of the 1993 Act, it would not be unreasonable to ask the tenant to pay some or all of your legal and valuation costs.

I am a freeholder, involved in a lease extension. Will I need a solicitor?

If you are served with a Section 42 Notice or a Section 13 Notice, you should take legal advice immediately.  If you fail to respond to the Notice of Claim or do not respond in the appropriate way, you are at risk of losing out.

Even if you are happy to deal with the leaseholder ‘informally’, you will need a solicitor to deal with the grant of the new lease to the tenant, or with the conveyancing of the freehold interest if you are disposing of it.  This is not something you can do yourself.

If represented, the tenant is unlikely to want to make a payment to you in person as there can be legal difficulties in completing any lease in such a way were the counter party is not a solicitor.

In an extreme case it might be possible for one party to be represented and to draft a document for signature only by the other but this has a serious disadvantage that the unrepresented party is not able to receive legal advice on the nature or effect of the document and is at risk of losing out.

How can I find out how much my lease extension will cost?

This is a question for a valuer or surveyor who specialises in this area, but if you know the lease length and the current value of the flat and the ground rent schedule, then you can have a go at working this out approximately by using one of the calculators available online, like this one:

http://www.bishopandsewell.co.uk/lease-extension-calculator/

These type of calculation tools come with a health warning as they are only approximate, and cannot consider the unique circumstances of your property, however they can be useful in deciding whether you can afford to go forward with the process, or more importantly if you are thinking about making an offer on a short lease property, what the likely cost will eventually be.