Unwelcome chickens may be coming home to roost for people who bought flats in the 1970s and 1980s on relatively short leases of 125 years. Leaseholders have rights in law to extend their leases by 90 years (Leasehold Reform Housing and Urban Development Act, 1993) , but the costs of doing so can jump dramatically once the unexpired term of the lease gets below 80 years.
One of the main reasons for the big jump in costs when extending a lease of 80 years or less is that valuers must take into account marriage value. This is a measure of the potential for increase in the value of the flat arising from the grant of the new lease, and it has to be shared 50:50 between the parties. Marriage value does not apply when the unexpired term is still over 80 years.
In the calculation of the marriage value the leaseholders' and landlord's valuers will use local knowledge and experience to assess the increase in value of the flat arising from the new lease. However, you can get a ballpark idea of the cost of extending your lease by using the quick calculator on the Leasehold Advisory Service (LEASE) web site at www.lease-advice.org
LEASE advisory board director Genevieve Mariner, head of the Enfranchisement and Leasehold Reform team at chartered surveyors Strettons said: “Many flat owners put off the expense of lease extension, but they should be aware of the 80 year timebomb.”
An advice guide on lease extension is available at www.lease-advice.org.
Find LEASE (The Leasehold Advisory Service) at www.lease-advice.org or call them on 020 7354 5380.
The Leasehold Advisory Service (LEASE) is an Executive Non Departmental Public Body (ENDPB) funded by Government to provide free legal advice to leaseholders, landlords, professional advisers, managers and others on the law affecting residential leasehold and commonhold. It also provides a mediation service.
LEASE is funded by -
* Communities and Local Government (CLG)
* Her Majesty's Court Service (HMCS)
* Welsh Assembly Government (WAG)
LEASE provides advice by telephone, by letter or email, or in person at the office; and it can arrange seminars and group meetings where large numbers of leaseholders want to discuss a joint issue. LEASE publishes a wide range of free advice notes, that are available on request or to download.
Leasehold advisers are available for telephone advice from 9:30am to 5.00pm Monday to Friday 0n 020 7374 5380
Further information from: Lynne East
Phone: For enquiries please contact the above department