3 Steps To Successful Lease Extension

Author: Tim Bishop

If you're a leasehold property owner, then lease extension is probably one of those tasks that you'd like to put off. You may have a nagging sense that it needs to be done at some point, but the time span of the average lease can easily lead you into thinking it's not urgent. After all, everyday life has enough challenges without worrying about something that won't happen for another 99 years! However, this can be a serious and costly mistake. The length of a lease directly affects the value and saleability of your house, and the longer you leave it, the more expensive it becomes. Luckily, lease extension needn't be difficult or time consuming, if you follow this simple strategy.

1. Check your existing lease
How much longer does your present lease have to run? Remember, short leases seriously affect the value of a property, unless you're lucky enough to live in an urban property hot-spot. More to the point, most buyers are reluctant to buy a property with a short lease, and most mortgage companies are reluctant to lend against them. Even if you are not thinking of selling soon, you should still think about the future and looking after your investment by extending your lease. If the remaining lease term is approaching 80 years, then you need to act fast (see point 2).

2. Weigh up the costs
Extending a lease naturally requires some initial outlay, so you'll need to balance short term expenditure against long term security and financial gain from resale. The crucial time for an extension is 80 years. When the remaining term dips below that, you become liable for a "marriage value" on the extension. This is essentially a 50/50 split with the landlord of a notional increase in the property's value - an increase that you have to pay up front, even though it hasn't actually happened yet. This makes the whole thing much more expensive, so the lesson is - extend your lease before it dips below 80 years!

3. Turn it over to a professional
This is really an essential part of your strategy. Working out the value of a lease extension is virtually impossible for the uninitiated, since it involves balancing up a number of factors, such as local property prices and the loss of the landlord's ground rents. As such, you'll need to appoint a professional valuer, usually a surveyor. You'll also need to appoint specialist legal representation. A specialist lease extension solicitor will deal with all the paperwork, communicate with your landlord and process the conveyance of the new lease, this will all make it simpler for you.
Although extending your lease might take a small amount of effort, if you follow this strategy you will reap the rewards in the end.

Article Source: http://www.articlesbase.com/law-articles/3-steps-to-successful-lease-extension-4171952.html
About the Author


If you are considering extending a lease then contact Bonallack & Bishop specialist Lease Extension Solicitors today. Senior partner Tim Bishop is responsible for all major strategic decisions and has grown the firm by 1000% in 13 years. He sees himself as a businessman who owns a law firm.