Lease Extension Rights

Under the 1993 Leasehold Reform Housing and Urban Development Act most residential flat owners have a right to an additional 90 year lease extension as well as the unexpired current term at a nil ground rent.

The main qualifying criteria are:

• The flat owner must have owned the property for at least 2 years.
• The original lease was over 21 years in length

The calculation of the premium to be paid for the lease extension comprises:

• The diminution or loss in value of the landlord's  interest in the flat as a result of the lease extension. 
• The landlord's share of 50% the marriage value. 

  If a lease has less than 80 years unexpired then 50% of the marriage value has to be paid. As with freehold purchases this is based upon the increase in value arising from the grant of a new lease. So Marriage Value is calculated by adding up the total value of the lessees interest, and the landlords before the lease extension, and comparing this with the figures once the lease has been extended.   

   ...                            ..-- --- - ----------------- - - - -------------- - - - - ----------- --- ----

• Compensation from any loss arising from the grant of the new lease.

Whilst the Act requires a nil ground rent a landlord may want to agree a higher ground rent to retain some form of income. The lessee will usually benefit from this by a reduction in the premium to extend.     

Each Side Leasehold can provide property valuations for lease extensions.

As with freehold enfranchisement this is a complex process and we will guide lessees and landlords through the process and help obtain the correct premium or price.

For more advice on lease extension please call us free on 0800 902 0466 or email info@eslease.com.

Please click here to see what our clients have to say about us.