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They may specify a certain length of time for the extension or may allow for the use of the property on a month-to-month basis. Lease extensions are an important part of the lessor-lessee relationship as they reduce the risk involved for each party. For example, a landlord who agrees to a lease extension can keep the original lease terms intact including any provisions about notices to vacate.
This means the tenant has to provide prior written notice before vacating the property. The landlord can rest assured there are no surprises, and won't have to risk an empty unit. Similarly, a lease extension can give tenants some stability. With a proper extension in place, tenants won't have to give up their units after the lease expires.
Although not a requirement, lease extensions reduce the risk involved for both the lessor and the lessee. Businesses enter lease agreements and agree to lease extension agreements for a variety of reasons. The primary reason for leasing an asset rather than buying it is risk management.
A business may decide to lease a parcel of land so that it is protected from the risk of fluctuations in land prices. This allows the business to focus on its core competency rather than real estate. Another reason for leasing is to simplify disposal.
A construction company, for instance, may decide to lease a piece of heavy equipment, rather than buy it, so that it does not have to deal with selling the equipment after it is no longer needed.
A lessee may pay more per hour in order to use the equipment, but this can be worthwhile if it saves time and the cost of selling the equipment at a later date. A lease extension may be executed between a landlord and a tenant.
In this case, if both parties choose to continue the tenancy, the landlord may issue a lease extension when the original lease is set to expire. Lease extensions may also be granted to lessees by car dealerships. Let's assume a consumer leases a car for four years. After that period, the lessee may decide to buy or begin another lease for a brand new car.
This means that once extended, flat owners can have the peace of mind that their investment in their own property is secure for a lifetime and the asset is no longer a diminishing one.
A flat with a lease extended under the statutory provisions should sell for full market value even if it is held by the leaseholder for a generation. Similarly, collaborating with fellow leaseholders to buy the freeholder out resolves the lease length issue because with the freehold purchase comes the right to extend your individual leases by years at any time.
The collective enfranchisement route also has other benefits, particularly if flat owners are in dispute with their freeholders over maintenance or lack of it.
By purchasing the freehold, blocks of flats become effectively co-operatives managing their own affairs in terms of maintenance and insurance and usually make significant savings in the process. The Leasehold Reform Act lays down a formula for establishing the price of extending your lease or buying the freehold but what constitutes a fair price remains hotly contested. Within the set formula see page? For this reason both sides should take independent advice.
Often a price can be privately negotiated but valuation advice is essential to ensure that the terms and price of informal deals are equitable while an awareness of the legal process is useful in case they are not. Stewart Gray from Austin Gray, an East Sussex based property company specialising in lease extensions.
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Home » Lease » Extending your lease » Why extend your lease. But the route you take will also make a difference. In particular the statutory or formal route under the Leasehold Reform Act , has certain built in deadlines.
As a result of a formal lease extension will probably take on average between 8 months and a 1 year to complete. How long an informal or voluntary lease extension will take is harder to estimate.
Because that really does depend on how quickly the freeholder moves. But to give you an example, one of our specialist leasehold team, when asked for the kind of range of timescales that an informal lease extension could take, provided the following statistics from 2 recent cases, setting out the shortest and longest she had come across recently:. And that could be as much as 6 months. Thankfully only a very small percentage of cases actually need to end up at the Tribunal.
Any tenants with concerns that their block is poorly managed or who thinks that their management charges are too high, might also want to consider exercising their right to manage. Click here to read more about how our right to manage solicitors can help leaseholders like you to acquire the ability to manage your own block. Our expert Lease Extension team have already helped thousands of people like you with their Lease Extension. We can help you too in extending your lease wherever you live in England and Wales.
We don't even need to see you taking your instructions by e-mail, phone and Skype video or FaceTime. I had need of the services of a solicitor to guide me through a Settlement Agreement. Bonallack and Bishop helped make the whole process as simple as it could be. With their help and support we got everything sorted within 2 weeks which allowed me to get on with my life.
When my husband and I bought a buy-to-let flat it had a lease of less than 80 years and we knew we would need to either extend the lease or try to buy a share of the freehold. Since my first contact with Niki I have been extremely impressed.
She provided us with invaluable information right at the start, which helped us to work with the three other flat owners to decide next steps. She recommended a surveyor who was able to help us determine what it might cost to extend the lease or to purchase the freehold. Luckily, all the flat owners decided that buying the freehold was the best option and we instructed Niki to undertake this work for us.
Although we were prepared for the process to take a year or more, we were delighted that Niki was able to help us secure the freehold in under 12 months. She made the process very clear, particularly around the costs involved, which all the leaseholders found invaluable. I want to tell you how grateful I am for the professional, empathic and helpful way in which you handled my affairs and to wish you well in the future. My best wishes too, to your Secretary Georgina, who has also been most professional and helpful in every way.
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It will be one of the best decisions to make in difficult circumstances. Thank you very much Jennifer Slater for all your efforts.
Thank you for your advice. Should I ever have problems in the future I would not hesitate to contact Bonallack and Bishop. You have delivered a high class service and been patient with me. I felt my needs were understood and met perfectly. I have already recommended your name to several others. We have decided that your new name really should be Awesome Adkins! This refers to a lease extension carried out by Niki Adkins — a member of specialist team.
Every e-mail request was dealt with promptly and the clearness of her advice was without fault. She is also very approachable and affable which comes across in her e-mail content.
I would highly recommend Niki to any of my friends and associates. She explained the law and procedure well, dealt with all queries and correspondence quickly and recommended a specialist surveyor who provided useful advice regarding the valuation of the flat. For work of this type I would have no hesitation in recommending her and the firm. Can I just say a big thank you for all of your help on the lease extension.
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We were very satisfied with everything thanks Sara fuel very much for her work. Cannot praise Sara highly enough. You are always friendly but polite with a great deal of experience of the more tricky aspects of conveyancing and how to resolve them. The best part of your service, however, is your speed of response. You also go the extra mile. I am as you know a property lawyer with over 10 years of experience of property law so I can really appreciate the service and client support that you offer.
I think that you are brilliant and have recommended you to the estate agent to use on other sales. Thank you again for making what could have been a very stressful move on the legal side run as smoothly as possible.
The process is complex and a procedural minefield. Please also pass on my thanks to your colleague …… who helped to settle the employment matter. I am delighted with the outcome of both matters and would have no hesitation in recommending Bonallack and Bishop solicitors.
My sincere thanks and appreciation. Our situation was not particularly straightforward, but the lawyers who dealt with us gave us confidence that they really did know their way around the relevant legislation. I feel that their concern for their clients is explanatory at all times from all their staff. From the moment you enter the building they make you feel very welcome as they understand that it can be quite an intimidating ordeal visiting a solicitor.
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