Valuation
Leashold Reform
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Leaseholder's Rights
The current leasehold reform legislation gives most leaseholders of flats and houses (who have leases with an original term of more than 21 years) rights either to extend their leases or to buy their freeholds.
Companies, Trusts and investors are no longer precluded from making a claim. In summary please note the following; this is a technical area of the law and therefore can be difficult to understand at the outset.
Leasehold Reform Act 1967 (as amended) - Houses
A lessee of a house, who has owned the lease for longer than two years (prior to the date of claim), would be entitled to acquire either the freehold interest or a 50 year lease extension. There is no longer a requirement to fulfill a residency test, except in a limited number of cases.
Leasehold Reform, Housing and Urban Development Act 1993 (as amended) - Flats
A lessee of a flat, who has owned the lease for longer than two years (prior to the date of claim), would be entitled to acquire a 90 years lease extension, at a peppercorn rent.
Alternatively, a group of leaseholders would be entitled to collectively acquire their freehold. This is subject to the following:
- The building being independent or being part of a building which is capable of independent development;
- The building having a minimum of two flats;
- There being no resident freeholder (unless the building is a purpose built block of flats or comprises more than four flats);
- No more than 25% of the internal floor area of the building being in non-residential use, e.g. a shop or office;
- At least two thirds of the flats being held by qualifying tenants (holding leases with an original term of more than 21 years). You cannot be a qualifying tenant if you hold a business lease, or own three or more flats in the building;
- The number of participating leaseholders owning more than 50% of the flats in the building;
There are no ownership or residency tests.
General Points
The personal representatives of a deceased qualifying tenant can now also make an individual lease extension or freehold claim, or participate in a collective enfranchisement, provided that the right is exercised within a period of two years from the date of grant of probate.
A lessee who holds a lease with more than 80 years left to run (at the date of valuation) will no longer pay any share of marriage value (the additional value released when the leaseholders' and freeholders' interests are merged). This reduces the price for the lease extension or freehold in such cases.
For a lessee who does not qualify under the current legislation, there may nevertheless be opportunities to approach the Freeholder for a voluntary lease extension or freehold sale.
For more detailed information we would refer you to: www.lease-advice.org
In any event all potential claimants are advised to seek legal advice from their solicitors before making a claim.
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Our Services
We would be able to advise you on all aspects of your claim, including
Pre-Claim Advice
In conjunction with your solicitors we would be happy to discuss the details of your property with you, in order to investigate your potential rights as well as advise you on the most effective way of dealing with a proposed claim.
Initial Valuation Advice (in accordance with established principles)
We would be able to advise you on the value of your existing lease, the proposed extended lease or freehold interest, and the appropriate price for your lease extension or freehold interest. We would also be able to liaise with your solicitors in the preparation of your Notice of Claim.
Negotiating a Settlement
Whether in claims under the legislation or in voluntary transactions, we would be pleased to conduct negotiations with your Freeholder or their Surveyors to seek a settlement on your behalf. In the case of a formal claim (under the legislation), if there is failure to agree by negotiation between the parties, then there may be a reference to a Leasehold Valuation Tribunal to determine the unresolved issues (and, if dissatisfied with the LVT decision, either party may appeal the case to the Lands Tribunal).
LVT and Lands Tribunal Hearings
Working with the client's solicitors, we would prepare the valuation case, including the preparation of the necessary Submissions (Statement of Agreed Facts & Issues and Expert Witness Reports) for the Hearing; also attend conferences with Counsel and represent clients at the Hearings.
