Did you know that a leaseholder (tenant) has the right to extend their lease once they have owned that property for 2 years? If you own a long lease (a lease which was originally granted for a term of at least 21 years) you might be interested in this article. One of the downsides of owning a long leasehold flat (or maisonette), is that it becomes a reduced asset. The fewer the number of years that remain on the lease, the less valuable it becomes. Luckily the law understands this and therefore the leaseholder legally has a right to extend their lease once they have owned it for 2 years.
Heard of Peppercorn Rent? The leaseholder could have a way of paying nominal ground rent on a lease extension, if they have an unexpired lease term of less than 90 years. Once the term of the lease is less than 80 years, the cost of extending it increases significantly.
It has to be noted that the landlord is entitled to a premium for the lease extension. It’s a calculation set out in the Leasehold Reform Housing & Urban Development Act 1993 (as amended by subsequent Acts) Leasehold Reform Housing & Urban Development Act 1993.
Need further advice with lease extensions or general property law? Contact me or the Allsquare Law team on 01628 200215
