How do I extend my lease?
If you are a shared owner or leaseholder you will have a lease for your property. A lease is a contract that allows you to use a property for a specified term, normally 99 or 125 years. The original lease term will decrease over time and as the term gets shorter you may be in a position where you will need to increase the length of the term of the lease.
Why is this important? Some mortgage lenders may be reluctant to lend money against a lease with a short term, making the sale of your home more difficult. This varies considerably with different lenders. As an example, some lenders will request an extension on a lease with 70 years left (in order to lend funds against the property) whilst other lenders may request a lease extension on a lease with a term of 50 years remaining.
If you wish to extend your lease, you will need to have owned the property for at least two years. Shared ownership leases do not qualify for lease extensions unless you have staircased to 100%.
You will normally need to appoint a valuer and a solicitor to extend your lease. A valuer will help establish the cost of extending the lease and a solicitor will need to serve notice on us, stating your intentions as well as undertaking other necessary legal work. Your solicitor and our solicitor will then aim to come to a mutual agreement on the price of a new lease.
Under the requirements of the Leasehold Reform, Housing and Urban Development Act 1993, we are required to extend your lease for 90 years plus the remaining life of your existing lease (eg if you still have 70 years left on your lease your new lease will be for 70 years + 90 years = 160 years). You will be responsible for your legal fees as well as reasonable costs incurred with extending the lease.
We would always recommend that you seek independent advice from a solicitor who specialises in lease extensions to deal with your enquiries.
If you would like further information on lease extensions, please contact Karenza Frear (senior lawyer) on 01305 216141.