If you own a flat it will be held on a lease with a remaining term that shortens as time goes by. Whilst a lease that is greater than 125 years is considered ‘long’, an 80-year lease might be worth 90% of this and a 60-year lease around 80%. It can be difficult to obtain mortgages on short leases which may also make the property difficult to sell.
It is also at the 80-year mark that ‘marriage value’ is payable, so for clients whose lease is fast approaching this point, acting quickly and effectively is essential.
Taylor Mitchell Surveyors are experts in the Leasehold Reform Act that allows owners to extend their lease by 90 years whilst also extinguishing their ground rent in exchange for a premium payable to the freeholder. Once you have your report you can either approach your freeholder informally or formally with the service of a S42 notice.
In either scenario, your freeholder will respond with a counter figure that will often need to be negotiated down. We have save our clients tens of thousands of pounds every year, and can even represent you at Tribunal if required.
You can also acquire your freehold (enfranchisement) subject to having 50% participation in your building. The process is similar to that of a lease extension but there are more elements to consider such as whether there are parts of the building that could be developed such as loft spaces or store cupboards.
If you would like some free advice on your particular situation or a quote to provide a valuation and undertake negotiations on your behalf please call us on 01223 620755 or send an email and one of our team will be happy to assist.
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From a low value lease extension to freehold enfranchisements worth hundreds of thousands of pounds, Taylor Mitchell have been on the side of leaseholders for over 10 years.
Matthew Price (Hons) BSc MRICS has successfully represented clients at the First Tier Tribunal (FTT) and both he and Steve Hobbs have been selected as expert witnesses by the President of the FTT in absent landlord claims under both the 1993 and 1987 Act. We have gained a reputation for providing straightforward and competent advice. We also work closely with a number of prominent legal practices within the leasehold and enfranchisement arena.
We are also up to date with the latest Leasehold Reform proposals which we recommend clients familiarise themselves with.
we only provide services to areas where we have a local expert surveyor.
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Our surveyors have negotiated hundreds of lease extensions and enfranchisements from the straight forward through to appearing at Tribunal.
For in depth advice and a quotation.
Book one of our Chartered Surveyors to undertake your survey.
One of our Valuers will be in charge of your case and analyse the market.
You will receive your report within 4/5 working days followed by a telephone conversation.
Your report will be forwarded to your solicitor who will serve notice on your Freeholder.
Under the Leasehold Reform, Housing and Urban Development Act (1993), owners of a leasehold property can compel their freeholders to extend their lease by 90 years, and eliminate their ground rent in exchange for a sum of money.
To determine this sum, a valuation will need to be carried out by a surveyor working in the interest of the leaseholder, and a separate surveyor working in the interest of the freeholder. The valuation includes:
If these two surveyors cannot reach an agreement, the case can be referred to the First-tier Tribunal for determination.
When you extend a lease the value of the lease becomes higher, and the value of the freehold becomes lower. When that lease is short the uplift in the value of the lease will usually be greater than the diminution in the value of the freehold. That additional ‘profit’ is called marriage value. Under the legislation, when a lease has less than 80 years left to run, 50% of the marriage value is payable to the freeholder when the lease is extended.
If the property still has 80 years or more on the lease the marriage value is disregarded, and the leaseholder will not have to pay it. This is why it’s financially beneficial to start the leasehold extension proceedings before the remaining term falls below this point.
The First-tier Tribunal – previously known as the Leasehold Valuation Tribunal is a sort of small court. At a hearing both surveyors submit their evidence, and the Tribunal members make a determination based on that evidence. The Tribunal can determine the compensation payable to the landlord, and/or the reasonableness of the costs incurred by the landlord that he intends to recover from the tenant.
If a leaseholder is seeking an extension to their term, there are two ways they can achieve this; by making a private agreement with the freeholder, or serving a formal notice, referred to as notice under Section 42.
This opens the legal procedure for compelling a landlord to grant a lease extension, and the leaseholder must include a date at least 2 months in the future by which the freeholder must respond. If no Counter Notice is served by the stipulated date, you can apply to the County Court, who may grant you a new lease on the terms proposed in your notice.