Knowing what you are entitled to is important. Your rights as a Leaseholder/Tenant are explained below.
The Leasehold Reform Housing and Urban Development Act 1993 and the Commonhold and Leasehold Reform Act 2002 (‘the Act’), are the two pieces of legislation which give a Leaseholder, or Tenant, subject to a few qualifying conditions, the right to extend their flat’s lease by a further 90 years, or to purchase the freehold with co-lessees.
The right to ‘extend’ or ‘purchase’ is an absolute right of the Leaseholder. Once the Leaseholder decides to extend the lease or, in conjunction with others, buy the freehold, the process will provide for such an extension or purchase to be achieved. Either through negotiation between the parties or, in the case of a dispute with the Landlord, by the Leasehold Valuation Tribunal (“LVT”), the Leaseholder(s) will be able to purchase the freehold or in the case of an individual Leaseholder extend their lease.
A Landlord, conversely, will be entitled to receive fair value for the lease extension or freehold sale. The aim is that both Leaseholder and Landlord will achieve a fair and satisfactory result, which will leave the parties with exactly what they are entitled to, no more and no less.
To qualify, the lease must have an original term of at least 21 years. The Leaseholder must have owned the property for at least 2 years. The new lease will be for a term of 90 years – in addition to the current unexpired term. Once extended, the rent, under the new lease, will be at a peppercorn (effectively, nil). Service charges will remain unaltered.
To qualify, each participating Leaseholder must own a lease which had an original term of at least 21 years. No less than 50% of the Leaseholders of all the flats in the building must participate. There are a few additional requirements, but the above are the main prerequisites. If you are unsure if you qualify, please contact us today for a consultation and one of our team will be able to help.