Lease Extension Costs
Case Studies
1. Lease Extension under the formal “Notice” route with 67 years remaining.
Flat Owner, Mrs P, was in the process of selling her flat. She had 67 years remaining on the lease and all interested buyers had been put off because of the short term remaining. Most lenders will not lend on a flat with only 67 years remaining. TJM Law prepared and sent the Lease Extension Notice to the landlord triggering Mrs P’s right to a new lease with an extended term of 90 years together with zero (“peppercorn”) ground rent. TJM Law then oversaw the transaction through to completion and registration of the new lease. Our fees were £1,295 + VAT and expenses of £170.
2. Lease Extension having reached an agreement with the Landlord.
Flat Owners, Mr & Mrs S, wrote to their Landlord via the managing agents to ask if the landlord would sell them a lease extension and, if so, on what terms. They had 81 years left on their lease and wanted to avoid paying “Marriage Value” which significantly increases the cost of a lease extension if the lease drops below 80 years. The Landlord offered to extend the lease back up to the original term of 99 years with an increase in ground rent to a “modern” rent of £150 per year. Mr & Mrs S accepted the landlord’s offer and TJM Law dealt with the rest. TJM Law’s fees were £695 + VAT and expenses of £110.
3. Purchaser of a Flat wanted to buy the flat with benefit of Notice being sent to Landlord already.
Mr F was in the process of buying his flat which had 72 years remaining. He wanted to extend the lease once he bought the flat but the law states he could not send a formal notice on the landlord until he owned the flat for at least 2 years. Mr F did not want to wait this long, as the cost of the lease was likely to be more expensive in 2 years’ time. The seller could of course sign the notice and send it to the landlord, having owned the flat for over 2 years. The benefit of that notice could then be assigned to Mr F on his purchase of the flat. TJM Law drafted the Notice for the seller to sign. TJM Law also prepared the appropriate ‘assignment’ notices and also clauses for the sale contract to ensure the seller sent the Notice to the Landlord before completion. TJM Law’s fees were £250 + VAT for preparing the additional Notices and clauses for the contract and £1,295 + VAT and expenses of £170 for preparing the main Notice and seeing the lease extension transaction through to completion. TJM Law also acted for Mr F in the purchase of the flat ensuring Mr F only had one point of contact through the whole process.
