When you buy a leasehold property you are in fact buying the right to live there for a set number of years, rather than owning the property itself and the land on which it stands. In other words leasehold property is in reality a long term rental.
When you buy a leasehold property you are in fact buying the right to live there for a set number of years, rather than owning the property itself and the land on which it stands. In other words leasehold property is in reality a long term rental.
Flat leases are commonly either for a term of 99 or 125 years, whereas leasehold houses tend to have a lease for 999 years.
Leasehold property comes in many shapes and sizes ranging from purposes built blocks of flats and houses converted in to flats to flats over shops and commercial premises.
Hethertons specialise in dealing with residential leasehold properties and are members of the Association of Leasehold Enfranchisement Practitioners (ALEP) and are registered as an approved practitioner with The Leasehold Advisory Service.
Leaseholders have been granted a number of legal rights by various statutes, which include:
Enfranchisement is a highly complex area of law, one which requires the assistance of a qualified specialist such as Hethertons.
Lease extensions
When it comes to leasehold property, it is preferable that there is at least 80 years left on the lease. Anything below that can lead to problems in the mortgaging and/or sale of the property.
Most mortgage lenders are unwilling to grant a residential mortgage on a leasehold property with less than 80 years left on the lease. Once the lease falls to that level the property is likely to diminish in value year by year, trapping the owner until the position is redressed by either collectively purchasing the freehold interest or obtaining a lease extension.
The collective purchase of the freehold is often difficult to achieve as it involves a sufficient number of flat owners willing to participate and cooperate with one another to agree and fund the purchase price.
Because of the potential difficulties that can cause, in leasehold properties with a significant number of flats it is often easier and more cost effective for an individual flat owner to simply apply for a statutory lease extension of their individual lease.
The relevant statute lays down a number of qualifying criteria for a lease extension, both in relation to the property itself and the leaseholder.
If you wish Hethertons to consider whether you qualify to extend your lease and require further details of the procedure and likely costs involved then please contact one of our specialist practitioners, namely Toby Conyers-Kelly (Leasehold Enfranchisement) or Tom Henry (Commercial Property) to discuss the position further.
Leasehold enfranchisement
The collective purchase of the landlord’s freehold interest is the best option where sufficient of the leaseholders are ready willing and able to work together to achieve that outcome.
The qualification criteria are complicated, but the key features are:
Legal costs and valuation fees
In both lease extension and collective enfranchisement the flat owners in addition to their own legal costs and valuation fees have to pay the reasonable legal costs and valuation fees of any landlord. Where there is more than one landlord each landlord’s costs and fees have to be paid.
Valuation and price
In most cases, Hethertons recommend that you obtain a valuation of the price to be offered (to purchase a lease extension or the freehold) from a specialist valuer that is a member of ALEP and/or registered as an approved practitioner with The Leasehold Advisory Service.
With a proven track record advising the landlords and flat owners of a range of different properties around England and Wales, Hethertons can make this complex legal process proceed to a satisfactory conclusion as smoothly as possible.
For further information or advice on any leasehold property matters please contact one of our specialist practitioners, namely Toby Conyers-Kelly (Leasehold Enfranchisement) on 01904 528217 email tck@hethertons.co.uk, or Tom Henry (Commercial Property) on 01904 528200 email th@hethertons.co.uk
Head of Leasehold Enfranchisement
Director