I am looking to extend my lease. Can you give some indication of the likely time scales?
Pursuing a lease extension (technically a new lease) under the Leasehold Reform Act 1993 places certain parameters on both the lessees and the freeholder in terms of time scales for response. A typical example would be as follows:
You instruct a surveyor to undertake a leasehold valuation of your property and produce a report indicating the likely premium to be paid. You would be requested to provide a full copy of your lease (often obtained from your solicitor if you don’t have a copy) to determine ground rents, the current lease length and any other relevant details.
Having received a copy of your report you decide to proceed. At this point a section 42 notice would need to be served on the freeholder. The notice must by signed personally by the lessee. Even if you employ an agent to act on your behalf they cannot sign the notice for you.
Week 2 plus 2 months:
Once the notice has been served, the freeholder will have 2 months to respond with a counter notice. To obtain this they will most likely instruct a surveyor to come and value your flat and also a solicitor to deal with your notice and serve their counter notice.
It is also worth noting that the freeholder’s solicitor may request that you provide them with a deposit of either £250 or 10% of the amount of the proposed premium, whichever the greater.
If the two figures are within a reasonable distance of each other you may well be able to agree with your freeholder the premium to be paid. If not you will need to instruct your surveyor to negotiate with the freeholder’s surveyor on your behalf.
Within a further 6 months:
Between the service of the counter notice and a further 6 months, the two surveyors will try to agree between them the premium to be paid by the lessee. This is typically done over email and each side is responsible for their own surveyor’s fees. The time spend varies on the complexity of each case and the speed at which this is completed is very much down to the surveyors.
If negotiations are failing to produce a conclusion, either side can apply to the Leasehold Valuation Tribunal (LVT) no sooner than 2 months but within 6 months from the service of the counter notice.
In most cases it is in neither side’s interest to go to and incur the costs of going to LVT and each side’s surveyor should advise his client of the full cost implications of the arrangement and therefore provide advice on whether it is the best solution.
Following the LVT decision:
The LVT determination will become final within 28 days. Either side can appeal to the Lands Tribunal with the leave of the LVT.
Once the LVT decision is deemed final the freeholder must provide a draft lease within 14 days. Your solicitor should be instructed to review the lease as you then have a further 2 months in which both parties should enter into it.
If these two months pass, the leaseholder can apply to court within 2 months and the freeholder fails to meet his obligations.