Lease Extension – How much does it cost?
Specialist lease extension advice is essential if you’re planning to extend your lease. But before you decide to extend your lease, you should be aware of the various costs you will incur when you apply for a lease extension.
Although the cost of extending a lease varies according to the remaining term of the lease and the nature of your leasehold property, these costs include:
• the costs of advice from your own lease extension solicitors
• your landlord’s reasonable legal and valuation costs – as the person who started the lease extension process, you will also have to pay your landlord’s reasonable legal costs (and the cost of the landlord’s own lease extension valuation) as part of the agreement.
However these costs have to be reasonable – your landlord can’t just charge whatever he or she wants, and if you can’t agree a figure with your landlord, you have the option of challenging those costs at the First-Tier Property Tribunal [previously known as the LVT or Leasehold Valuation Tribunal]
• the costs of the lease extension valuation report. Some leaseholders think that they can do without a valuation, however, we strongly advise that you need to get a valuation of your property carried out by a qualified surveyor who specialises in leasehold extension valuation advice – because you really need to know the right price to extend your lease.
• the ‘premium’ payable to your freehold for the lease extension. This is made up of the aggregate of:
The diminuition in value of the freeholder’s interest. This is the value of the landlord’s present interest compared with the value of his interest once you extend the lease
The Marriage value. This is only payable if the remaining term of your lease was below (even just one day below) 80 years when you served the initial lease extension notice on your freeholder. Marriage value is the increase in the value of your flat once you have extended the lease. This ‘profit’ element is only achievable because the freeholder has agreed to grant a lease extension and therefore the freeholder is entitled to 50% of this profit;
Any other compensation due to the landlord.
Got a lease extension question? Call our specialist solicitors on FREEPHONE 0800 1404544 for FREE initial phone advice – with no strings attached.
Lease extension “marriage value” – what’s that all about?
It’s worth noting that there is an extra element that the landlord can charge as part of the compensation is due, when your lease drops below 80 years – this is the Marriage Value as referred to above. That’s why, if you’re able, it always better to extend your lease before it drops below 80 years, rather than to wait until you have less than 80 years to run, when you will need to pay the additional marriage value premium.
This is yet another reason why it makes sense to extend your lease as soon as you possibly can – to keep the amount of cash you have to pay to your freeholder by way of the premium as low as possible – and therefore to lower the cost of extending a lease overall.
Want to Know What Your Lease Extension Will Cost? Call FREEPHONE 0800 14045 for Your Free Estimate
On this website we can obviously only give general advice about the kind of costs you will need to think about when extending your lease.
However, our team understand that if you’re thinking of extending your lease but not quite sure whether it’s right for you now, or you are simply not sure whether you can afford the cost at the moment, what you really need is a rough idea of how much your lease extension will cost you.
The answer? Simple.
Just call our team now on FREEPHONE 0800 14045 for a free estimate of how much your lease extension is likely to cost – which includes the cost of the premium and the legal and valuation costs.
3 Practical Tips to Keep the Cost of Your Lease Extension down
- make sure you extend your lease as soon as possible – especially before the critical 80 year period
- make sure you appoint a specialist solicitor for the right legal advice
- make sure you instruct a specialist surveyor – so you get the right valuation premium.
Should I save costs by doing without a surveyor and relying on an online lease extension premium calculator?
In a nutshell, our advice is simple – no.
The online calculators rely on very limit little information and can only give the vaguest and most approximate idea of the premium you’re likely to pay. If you try to negotiate with your freeholder on the basis of a premium you got from an online calculator, you won’t be taken seriously – and any sensible freeholder, and there own surveyor, will not what is at best a guesstimate from an online account later seriously.
However, sometimes it can be very helpful to have a very rough idea of the kind of premium that might be involved without going to the expense of a surveyors report.
This might apply, for example, if you’re thinking of buying a short lease flat yourself, and want to know how much it will cost to extend the lease, so you don’t end up paying over the odds for that short lease flat.
If that applies to you, then you might want to try the lease extension calculator which you can find out https://www.lease-advice.org/calculator. The site is run by LEASE, an organisation which was set up in 1994 by the government to provide free information and guidance to members of the public about residential leasehold law.
For Specialist Lease Extension Advice, Talk to Us First. Call Now
Wherever you live in England or Wales, our expert lease extension solicitors can help you.
So for expert FREE initial phone advice and a FREE estimate of the total cost of lease extension
- Call our team today on FREEPHONE 0800 1404544, or
- Send us an email using the contact form below
Comments or questions are welcome.