There are two main routes to choose from. The first is via the informal route and the second via the statutory route.
You may be able to agree an informal lease extension with your landlord. We can assist in ensuring that all of the legal documentation is in order and guide you through the process from start to finish. The benefit to following the informal route is that it can be quicker and more cost effective than following the statutory route (which is explained below). However, this is dependent on whether the terms being offered by your landlord are acceptable. There is no duty on your landlord to grant an informal lease extension and as a result some landlords may demand more than they would otherwise be entitled to under the statutory route, be it a higher premium, lower term or increased annual ground rent. Whatever the terms being offered, our team can provide effective commercial advice on the deal to assist you in making the correct decision on whether to proceed with an informal lease extension or follow the statutory route explained below.
If you are a leaseholder who has owned your property for more than two years and your lease was originally granted for a term of more than 21 years, then the chances are you will be eligible for a statutory lease extension. You will be entitled to a term of 90 years on top of your current term. Your ground rent will be reduced to a peppercorn and the premium you will pay must be a reasonable figure, which will normally be negotiated between your chosen surveyor and your landlord’s chosen surveyor. There are strict time limits to abide by in following the statutory route and our team will be on hand to guide you through the entire process from beginning to end.
Firstly, we will check your eligibility for a statutory lease extension. We will then draft and serve the initial notice of claim on your landlord, review and report to you on your landlord’s counter notice and approve the renewal lease. Once terms have been agreed we will then deal with completion for you, to include all post-completion formalities. If terms cannot be agreed within the statutory time limits (which in experience is extremely rare) then an application can be made to the First Tier Tribunal Property Chamber to determine the terms. This will not only ensure that you obtain a lease extension at the end of the process, but will ensure that you obtain a renewal lease on fair terms if your landlord refuses to be reasonable.
Whist the statutory route can take a little longer than the informal route, it provides certainty on the terms you will be obtaining. It also eliminates the risk of your landlord simply walking away from the negotiating table and leaving you without recourse (as is possible with an informal lease extension), and provides the protection needed to ensure that the terms are fair.
As with the informal route, our dedicated team of solicitors will be on hand to provide you with effective legal advice and efficient commercial guidance to ensure that you obtain a favourable outcome.
Whether you simply want to be more hands on in the running of your building, wish to acquire the freehold to increase the attractiveness and saleability of your leasehold property, or are frustrated with the way your landlord has been managing the building, Healys can assist you in ensuring a successful acquisition.
The basic test is that generally, the majority of qualifying leaseholders in your building (50% or more) can serve a formal notice on the landlord to acquire the freehold to your building. We will check your eligibility, draft and serve the initial notice of claim, review and report to you on your landlord’s counter notice, approve the transfer documentation and then deal with completion and all post completion formalities for you. If terms cannot be agreed within the statutory time limits then an application to the First Tier Tribunal Property Chamber can be made to determine the terms. We will assist and guide you through the application process.
The advantage of buying the freehold is that you will acquire outright ownership of the building and will have a say in the control and management of you block. You can appoint your own managing agent and grant yourselves new long leases on favourable terms that can enhance the value of your individual properties. With over 10 years’ experience, Healys’ dedicated team of experts can guide you through the entire process from beginning to end.
Under Part 2, Chapter 1 of the Commonhold and Leasehold Reform Act 2020 you have a statutory right to take over the management of your building, providing certain criteria are satisfied. Generally, you will have the right to take over the management of your building if a majority of the tenants in the block take part and the statutory procedure is followed correctly. Your landlord can only object in very limited circumstances, meaning a claim for the right to manage is a relatively safe process.
In addition to being safe, the right to manage is normally a process that is undertaken where the leaseholders cannot afford or simply do not have the appetite to acquire the freehold outright. This process therefore provides an inexpensive alternative as there is no requirement to pay a premium.
The downside to the right to manage route is that the landlord will remain in the picture. However, once the right to manage claim is completed, you will have the collective right to decide how the building is run, to include how charges are levied against the leaseholders in the building. It therefore provides a valuable alternative to the freehold acquisition process where outright acquisition is not possible.
With over 10 years’ experience, Healys’ dedicated team of experts can guide you through the entire process from start to finish to achieve the best outcome for you.
Under the Landlord and Tenant Act 1987, certain disposals trigger the right of first refusal. If you are reading this section then it is very likely that your landlord has notified you and your fellow leaseholders that it intends to make such a disposal and is offering it to you all first.
You will normally have a minimum of 2 months from receipt of the notice from your landlord within which to make enquiries, form a majority (more than 50% of the leaseholders in the block) and accept the offer. A failure to obtain a majority and / or serve a counter notice in time will give your landlord the freedom to sell to a third party. You must therefore act quickly and decisively and Healys can take you step by step through the entire process from start to finish. We have over 10 years’ experience in handling such claims and can provide you with invaluable legal and commercial guidance.