Although we all talk of lease extension or extending a lease the right that a lessee has is not to extend his lease but to acquire a new lease (in substitution for the existing lease) for a term expiring 90 years after the date of expiry of the existing lease. To qualify to extend a lease the lessee has to have owned the flat for at least two years or have taken an assignment of the initial notice (the notice that starts the procedure) from such a lessee. The issue that gives rise to most disputes is the price the lessee has to pay for the new lease. If this cannot be agreed it can be determined by the Leasehold Valuation Tribunal.
An important point to note is that it is desirable for lease extension to take place before the term of the existing lease falls below 80 years – otherwise a higher premium will be payable.
Lessees often consider collective enfranchisement, which is the right of a number of lessees to acquire the freehold of their building. This gives them management control and facilitates lease extensions. However, collective enfranchisement is more complicated, more time-consuming and costly. Simply extending a lease is more straightforward.
We advise lessees and lessors of their rights and represent them in lease enfranchisement cases. We also make any applications to the Court or the Leasehold Valuation Tribunal that may be necessary.