We are specialists and aware of the complexities of the Leasehold Reform Housing and Urban Development Act 1993. (as amended)
Who we act for and where we act
We act throughout the UK, for both landlords and tenants, but in prime central London we generally act for tenants against the landed estates, such as: Bedford, Cadogan, Cambridge, Church Commissioners, The Crown, Eton, Eyre, Grosvenor, Howard de Walden, John Lyon, Myron Wilson, Portman and Sloane Stanley Estates. We also act for tenants against the Freshwater Group of Companies.
Section 42 and 45 Notices
We provide the valuation advice on the premium to be included in both.
Informal Lease Extensions
An informal negotiations would be where no Section 42 Notice is served by the leaseholder. This can save time and costs. We can assist with the calculation of the appropriate premium. Historically an extension would normally be agreed between the parties with a retained ground rent. Since the Ground Rent Act 2022, no new lease can be granted with a new ground rent. New leases will be at a peppercorn ground rent.
Initial Requirements
To qualify your interest in the flat needs to be registered at the Land Registry for 2 years, save for some special circumstances where changes in ownership have occurred.
You are entitled to a 90-year lease extension at £nil rent (a peppercorn).
You should extend your lease, particularly before there are less than 80 years remaining. Marriage value is excluded with more than 80 years remaining, so the cost is significantly less.
We can assist all parties. The first questions we shall ask are:
- How long is left on your lease and what ground rent do you pay.
- About your flat (floor area, basic room details, etc) and where it is.
- Who your landlord is?
- The purpose of your valuation: i.e. are you looking to sell?
With this information we shall provide you with a quotation. We provide both desktop (without inspection) and formal (with inspection) reports. A full inspection that should be accompanied with a full written report that is compliant or in accordance with the RICS guidelines.
A desktop report attracts a lower fee than formal report. However, when choosing your report, you should not decide on the cost. The knowledge, experience and expertise of your chosen surveyor is the key. We will assist you with this decision and always offer you the most suitable report.
The Report
The surveyor’s role is to assess the factors affecting value. This is where good knowledge is essential, especially of comparable sales evidence in the area. The surveyor should comment on the similarity in accommodation, lease length and condition. A report should include comment on:
- Property Location and Description
- Property Accommodation
- Property Condition and Development Potential
- Planning History and Council Tax
- Tenure
- Factors Affecting Value
- Property Photographs
- Schedule of Comparable Property Evidence
- Valuation Premium Schedules
The Valuation of the Lease Extension Premium
The valuation will produce a range of figures based on factors noted above.
Our advice includes opinion on the initial offer premium. This included the price for the Section 42 Notice (served by leaseholders) and Section 45 Notice (served in reply by the competent landlord (head leaseholder / freeholder).
A caution for a tenant is that if you quote too low (an unrealistic figure) you may risk costs and up to a year or more delay.
Our reports will advise you of an expected settlement range.
In some circumstances this may change, as there can be delays in serving notice and the opposite side’s argument has not been heard.
Negotiation of a Lease Extension & Costs
In our experience, neither party will initially offer what they expect to pay or receive. A good negotiator can save or gain his client substantial sums of money.
This is why fees quoted for the initial valuation are not the most crucial aspect. This is where expertise, experience and the qualifications of your surveyor is essential.
Important Note on Associated Costs:
In the event that a tenant exercises their right (serves a Section 42 lease extension claim) under the Leasehold Reform Housing and Development Act 1993 (as amended), the tenant will be liable for the landlord’s reasonable costs in determining the premium payable (valuation costs) and those of the landlord’s solicitor in respect of dealing with the Notice and in the event of the matter proceeding, the conveyancing costs. The tenant is liable for these whether or not the tenant proceeds (save as to the conveyancing costs).
In the event that the matter proceeds to the first-tier Tribunal, both sides bear their own costs relating to the Hearing. As with the determination of the premium, the tribunal can assess the legal and valuation costs.
Each party will also be responsible for their own costs during negotiations in most instances.
