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Leasehold Properties

Houses are very often (but not always) freehold, while flats and maisonettes are always leasehold.

Leasehold properties are affected by a number of additional legal and valuation complexities, making it crucial to get specialist legal advice before you commit to a purchase, sale or renewed leasehold agreement. Our trusted team of leasehold solicitors are on-hand to guide you on your leasehold rights and through the process whether you’re buying, selling, extending your lease of looking to buy the freehold title of your property.

A leasehold property attracts a split in the ownership, where the property owner solely owns the building (known as the tenant or lessee) and has an agreement with the land owner (known as the landlord or lessor) to remain on their land for a set number of years. The benefit of a leasehold property in the short-term is generally a lower purchase price compared to freehold properties (one of the reasons being because they don’t carry the same simplicity in the conveyancing transaction).

Our leasehold solicitors will:

  • Report fully on the lease and how it impacts on the use of the property
  • Explain about the management of the property as a whole
  • Set out what your responsibilities are under the lease
  • Identify the additional financial contributions that will have to be paid
  • Identify any additional rights and benefits attached to the property

With our plain English, no legal jargon promise, we take the time to fully explain all considerations that put you firmly in the decision-making seat. Your case will be handled by a small, highly skilled team, headed by conveyancers who have more than 20 years’ experience. The whole team will work with you to carry out your wishes so far as we possibly can.

Make a Free Enquiry Today to find out about our service, timescales and costs with no obligations. Use the contact form below to get in touch or call us on 01482 977 925.

Leases vary from one property to another and so it’s important you understand your specific legal rights when buying a leasehold property. Below are some key considerations to make on the short-, mid- and long-term implications of owning a leasehold property, so that you can decide whether these conditions are right for you.

Usage rights

Your lease will grant you exclusive possession of the property (usually the set area of your flat or maisonette) for the period of your lease. Within the terms of your lease you’ll find the conditions of how you can use are communal areas of your property as well as any restrictions that may apply, such as what you may use the property for or whether you are required to maintain certain parts of the property at your own cost.

Ground rent

It’s rare for a leasehold agreement not to include a ground rent charge, which is an annual fee payable to the landlord for the use of their land. Some ground rents can be fixed, but most agreements will contain an escalation clause that allows the amount to increase in certain circumstances, such as a percentage increase after a set time period or in relation to an increase in the value of the property. The ground rent should be considered ‘nominal’ in value, relative to your property location, size and value.

Be wary of a ground rent that seems excessive as this could fall outside the acceptable limits for mainstream mortgage lenders. Ground rent that increases too sharply can significantly affect the value of your property, meaning trusted lenders won’t approve a mortgage against this. Our skilled team of property lawyers will carefully check all lease terms to ensure these are fair and your assets are protected.

If you already own a leasehold and have been caught out by the Taylor Wimpey Lease doubling ground rent clause, take a look at our dedicated page here and get in touch to see how we can help.

Service charges

In addition to ground rent, you’ll likely have to pay an annual service charge towards the ongoing maintenance and insurance of the property (if you live in a flat or maisonette). The rates that can be reasonably charged will vary in expense, depending on the facilities of the building (such as an elevator, pool, communal entertainment, etc.), and so it’s important to obtain the full details prior to exchanging contracts.

Lease length

This is a crucial factor to take into account before agreeing to a sale, giving this has a direct implication on the value of the property and whether there’ll be any further expenses after you sign. Most long leases are granted to a fixed term of 99 or 125 years – some can even be granted for 999 years. When looking to buy a property, you’ll want to ensure there is at least 80 years left on the lease, otherwise you’ll incur additional costs to extend the lease.

Alterations clause

Lease agreements can often include a clause that prevents you from carrying out alterations without the landlord’s (lessor’s) consent. If alterations are permitted, be wary that landlords may ask for a premium as a consequential increase in the value of your property. There are also a number of repercussions that can result from making building alterations without the landlord’s consent, so it pays to be in the know as to what changes you can and can’t make.

Given all leasehold properties have an expiry date, you will either need to extend the lease of your property at some point or purchase the freehold title. Failure to do this means ownership of your property will revert to the landlord once the lease term comes to an end.

If you have less than 90 years of your term remaining it may become increasingly difficult to sell your property without extending the term of your lease.

Providing you have owned your property for at least two years and have a long lease (which is generally considered to be anything more than a 21-year lease) then you will automatically have the right to extend your lease. You can either agree the terms of your lease extension directly with your landlord and engage our solicitors for advice through the process, or we can assist you to apply for a formal lease extension application.

It’s ideal to extend your lease before it falls below a term of 80 years, otherwise an extension will incur a ‘marriage fee’. This fee is calculated against any increase in your property value; 50% of the increase will be owed to the landlord as payment for your continued use of the land. It’s also worth bearing in mind that the shorter the period left on your lease, the more expensive it may be to extend the term.

Lease Extension Costs

Likely costs involved in the lease extension process include:

  • Your own solicitor’s fees
  • Your landlord’s solicitor’s fees
  • Surveyor’s/valuer’s fees
  • HM Land Registry fees
  • The Lease Extension Premium (this includes a compensation amount for the landlord’s loss of ground rent for the original lease and the landlord’s loss in reversionary interest)

Confused by jargon? Take a look at QualitySolicitors’ Legal Glossary.

Throughout the lease extension process, we’ll use plain and clear English and, if there are legal terms that need to be explained, we’ll take the time to ensure you understand.

Quick Advice Call: Be Sure Where You Stand

£150 + VAT

Deducted from fees below if you instruct us to act

We will obtain a copy of your title from the Land Registry, undertake a quick review and give initial advice over the phone for up to 30 minutes. This will include advice on whether you qualify, whether there are any complicating factors, what steps you should take and how we can help.

Option 1: All Agreed? (Direct Agreement with Landlord)

£750 + VAT

If you have an agreement with your landlord on all terms of the lease extension, including the price you will pay for your lease extension, the number of years of the extension and what the ground rent will be, we will:

  • Deal with all the necessary paperwork
  • Liaise with your landlord’s solicitor
  • Register the extended lease with the Land Registry

Option 2: Not all agreed? (Non-Statutory Approach)

£950 + VAT

We can approach your landlord on an informal basis to negotiate a non-statutory leasehold extension. We can take care of the full process and, in doing so, we will:

  • Obtain a copy of your title from the land Registry
  • Agree with you the terms of your offer (based on online calculators)
  • Submit a without prejudice proposal to your landlord’s solicitor
  • Report to you with your landlord’s reply
  • Deal with the necessary paperwork if there is an agreement
  • Register the extended lease with the Land Registry

Please note:
This fixed fee does not include protracted negotiation. If your original offer is not accepted and you do not accept the counter offer, we can enter into additional negotiation by your instruction at the hourly rate of £200 + VAT. These fees are due even if you do not successfully conclude a negotiation with your landlord and must follow the Statutory Approach, outlined in Option 3.

Option 3: Not all agreed? (Statutory Approach)

£1,500 + VAT

A statutory lease extension adds 90 years to the existing lease term and resets the ground rent to a peppercorn (zero) per year for the duration of the lease. This formal approach to a lease extension is typically longer than the informal route but may be necessary if you haven’t been able to agree extension terms with your landlord. During this process, we will:

  • Instruct a specialist valuer to advise on the level of premium to be offered
  • Draft and serve the requisite notice as necessary to your landlord(s)
  • Accept service of any counter notice
  • Liaise with yourself and any relevant parties, such as your valuer, as to how best to proceed and agree with you the terms of the offer
  • Deal with all the necessary paperwork if the original or counter offer is accepted
  • Register the extended lease with the Land Registry

Please note:
If agreement cannot be reached, we will prepare a report for our litigation team to enable proceedings at the First Tier Tribunal.

Additional Charge: Consent of Lender (if your property is mortgaged)

£150 + VAT

Whether you choose Option 1, 2 or 3, if your property is subject to a mortgage then you will need the consent of your lender to the lease extension. We will liaise with your lender regarding your lease extension application to obtain their consent.

Additional Charge: Representation at Leasehold Valuation Tribunal

£ Hourly Rate

On rare occasions, you and your landlord may be unable to agree the premium or other terms of the lease extension. In such circumstances, you will have to refer your matter to the Leasehold Valuation Tribunal for an adjudication, where an arbiter or judge will review the areas of dispute.

We can support you to complete the application, represent you at the tribunal, and provide a report on the outcome of the adjudication. Given the work required is varied and dependant on the particular circumstances of any given case, we are unable to give a fixed fee. We will, however, give you an estimate of our likely fees so you can choose whether to proceed.

Owning the freehold title of your property might be appealing to you for a number of financial reasons, including increased sale value and removing the need for ongoing charges and lease renewal fees.

You will be eligible to buy the freehold title of your leasehold property once you have owned it for at least two years and if you have at least 21 years left on the lease term. It may be possible to negotiate the sale on an individual basis or, if you live in a flat or maisonette, you may like to consider whether you’d like to jointly purchase the freehold title with your neighbours (known as a collective enfranchisement).

There are a number of considerations to make for both options, and there’ll be a number of terms to negotiate with the landlord. If you’re considering this, get in touch with our leasehold solicitors for advice. We offer a Free Initial Assessment that will help give you clarity about your options.

Team Members

Craig Schofield
Associate Director. Beverley Branch Manager. Conveyancer
Dawn Cowley
Edward G. Wolverson
Chartered Legal Executive
Joanna Cheffings
Lesley Connor
Associate Director and Conveyancer
Loren Thompson
Associate Director and Solicitor
Lynsey Schofield
Associate Director and Conveyancer
Rachelle Laisnez
Director and Head of Commercial Property
Richard Allen
Managing Director and Head of Conveyancing
Richard Swaine
Operations Director
Tina Staples
Licensed Conveyancer

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