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Understanding Lease Length and Your Rights
Lease terms are getting shorter, particularly in areas like London, where 40-60 year leases are common. Since 1993, legislation has improved leaseholder rights, allowing easier lease extensions.
The Lease Extension Process
Leaseholders can extend their lease by serving a formal legal notice (Section 42 Notice) on the freeholder. A statutory lease extension adds 90 years to the current lease term and reduces ground rent to a nominal amount.
Gathering Essential Documents
To initiate the process, you’ll need:
- A copy of your lease
- Your latest ground rent demand
- A valuation report to determine the premium for the extension
Formal vs. Informal Negotiations
Leaseholders can negotiate informally with the landlord before serving a Section 42 Notice, though some landlords refuse informal discussions. Serving a formal notice secures legal rights and fixes the valuation date.
Importance of Professional Valuation
A lease extension valuation involves multiple factors beyond a standard mortgage valuation. Hiring an experienced valuer ensures accuracy, as incorrect valuation can make your claim invalid.
A lease extension valuation involves multiple factors beyond a standard mortgage valuation. Hiring an experienced valuer ensures accuracy, as incorrect valuation can make your claim invalid.
The lease extension is formalized through a Supplemental Lease and Deed of Variation, which must be registered with HM Land Registry. Buyers can inherit Section 42 rights if the seller serves notice before contract exchange.
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