Category: Blog

Secure Your Property: Unveiling the Possibilities: Shared Ownership and the Freehold Advantage

Shared ownership has emerged as a popular and affordable housing option for many individuals, allowing them to step onto the property ladder with a smaller initial investment. However, one question often arises: Can shared ownership be freehold? In this comprehensive blog post, we will delve into the concept of freehold shared ownership, exploring its benefits, implications, and potential impact on homeowners. Join us on this enlightening journey as we unravel the unique advantages and considerations associated with freehold shared ownership.

Understanding Shared Ownership

Definition of Shared Ownership

Shared ownership is a housing scheme that provides an opportunity for individuals to purchase a share (usually between 25% and 75%) of a property while paying rent on the remaining share. It is designed to help first-time buyers or those with lower incomes step onto the property ladder. While discussing shared freehold, if you’re also looking to extend your lease or calculate a lease extension, then contact us.

Understanding Shared Ownership

Eligibility and Application:

Prospective buyers must meet certain criteria to be eligible for shared ownership, which may include being a first-time buyer, having a specific income level, or living or working in a specific area. Once eligibility is confirmed, individuals can search for available shared ownership properties.

Choosing a Property:

Buyers can explore a range of shared ownership properties on the market. These properties are usually newly built or resold homes offered by housing associations or developers. The buyer selects a property that suits their needs and is affordable.

Assessing Share and Mortgage:

The buyer determines the share they can afford to purchase, typically between 25% and 75% of the property’s value. This share is based on their financial capabilities and the deposit they can provide. They then seek a mortgage lender who offers shared ownership mortgages to secure the necessary funds for purchasing their share.

Purchase and Fees:

Upon mortgage approval, the buyer purchases their share of the property. They will need to pay a deposit based on the share purchased and cover associated legal fees. The housing association or registered provider retains ownership of the remaining share.

Rent and Service Charges:

As the buyer doesn’t own the entire property, they will pay rent on the share owned by the housing association or registered provider. In addition, there may be service charges for the maintenance and management of the property and shared facilities.

Staircasing:

Over time, if their financial situation improves, buyers have the option to increase their share of the property. This process is known as “staircasing.” By purchasing additional shares, they decrease the amount of rent paid to the housing association or registered provider.

Selling the Property:

If the homeowner decides to sell the property, they can do so at any time. They have the choice to sell the entire property or their share only. The housing association or registered provider has the right to find a buyer for the share being sold, ensuring it remains within the shared ownership scheme.

It’s important to note that the specific details and processes may vary depending on the housing association, developer, or regional regulations. Buyers should seek guidance from professionals experienced in shared ownership to navigate the process smoothly.

 

Advantages of Shared Freehold Ownership

Increased Control and Autonomy:

Shared freehold ownership provides homeowners with a higher degree of control over their property compared to traditional leasehold arrangements. As a co-owner of the freehold, you have a say in decision-making processes related to the management and maintenance of the property. This allows for more autonomy and the ability to actively participate in shaping the future of the property.

Shared Costs and Responsibilities:

With shared ownership, the responsibilities of maintaining and managing the property are shared among the co-owners. This can help reduce individual financial burdens and make it more affordable to undertake repairs, maintenance, and improvements.

Flexibility in Customization:

Shared freehold ownership allows homeowners more flexibility in customising their individual units or communal areas. You have the freedom to make modifications, renovations, or improvements to your own space and collectively decide on enhancements to shared spaces, subject to any necessary permissions or agreements among co-owners.

Long Freehold Ownership Potential:

Just like freehold ownership, shared freehold ownership offers the potential for long-term investment gains. As the property value appreciates over time, you can benefit from the increasing market value of your share in the freehold. This can provide financial stability and a potential profit if you decide to sell your share in the future.

Greater Community Cohesion:

Shared freehold ownership fosters a stronger sense of community among co-owners. As you collectively share responsibilities and decision-making, it often leads to closer relationships and a shared commitment to maintaining and enhancing the property. This can create a sense of belonging and a more enjoyable living environment.

Control over Service Charges:

In many leasehold arrangements, homeowners have limited control over the service charges imposed by the freeholder or management company. In shared freehold ownership, co-owners have a direct say in the management of service charges. This can help ensure transparency, fair distribution of costs, and efficient use of funds for the benefit of all co-owners.

Legacy for Future Generations:

Shared freehold ownership can provide a legacy for future generations. As co-owners, you have the opportunity to pass down the shared freehold to your heirs, providing them with a valuable asset and potential financial stability.

Shared freehold ownership combines the advantages of both shared ownership and freehold ownership, offering greater control, shared responsibilities, potential financial gains, and a stronger sense of community. It can be an appealing option for those seeking a balance between individual ownership and collective decision-making.

Conclusion

In summary, a quality lease extension surveyor can provide valuable guidance, support, and expertise throughout the lease extension process. They can help you get a fair deal, avoid mistakes, and ensure that the process runs smoothly and efficiently. Be sure to choose someone with the necessary experience and expertise to ensure that you get the quality service you need.

When it comes to extending your lease, choosing the right surveyor can make all the difference. A lease extension surveyor can help you navigate the legal and financial aspects of extending your lease, ensure that you’re paying a fair price, and provide guidance and support throughout the process. However, not all lease extension surveyors are created equal, and choosing the wrong one can have serious consequences.

Secure Your Property: Avoid Mistakes with Leasehold Extension Surveyors

Here are some of the reasons why it’s important to choose a quality lease extension surveyor:

1. Lease extension surveyors can help you get a fair deal.

   So, does a landlord have to renew a lease in the UK? The answer is no – landlords are not obligated to renew a lease when it expires. However, there are certain circumstances where tenants may have a legal right to request a lease renewal or negotiate the terms of a new lease.

2. They can save you time and money.

   Choosing the wrong surveyor can lead to delays and extra costs, as well as potentially overpaying for your lease extension. A quality surveyor will help ensure that the process runs smoothly and efficiently, saving you time and money in the long run.

3. They can provide valuable guidance and support.

   Extending your lease can be a complex and stressful process, particularly if you’re not familiar with the legal and financial aspects of it. A quality surveyor can provide you with guidance and support throughout the process, helping to alleviate stress and ensure that you make informed decisions. In the UK, the process of home lease extensions is correctly and expertly guided by leasehold valuations.

4. Lease extension surveyors can help you avoid mistakes.

   The lease extension process can be filled with potential pitfalls and mistakes, which can be costly and time-consuming to rectify. A quality surveyor can help you avoid these mistakes and ensure that the process runs as smoothly as possible.

5. They can help you understand your rights and obligations.

   A quality lease extension surveyor will have a thorough understanding of leasehold law and can help you understand your rights and obligations as a leaseholder. This includes understanding your rights to extend your lease, the process involved, and any other legal obligations that may arise.

6. They can provide an accurate assessment of the property.

   A quality surveyor will have the necessary expertise to provide an accurate assessment of the property, including any potential issues or defects that may affect the value of the lease extension. This can help ensure that you’re paying a fair price for the extension and that there are no surprises down the line.

7. They can provide a detailed report.

   A quality lease extension surveyor will provide a detailed report outlining the valuation of the lease extension as well as any other important information related to the process. This report can serve as a valuable reference throughout the process, helping you make informed decisions and stay on track.

8. They can act as an impartial third party.

   Choosing a quality surveyor can help ensure that the process remains fair and impartial, particularly if there are any disputes or disagreements with the landlord or freeholder. A surveyor can act as an impartial third party, helping to resolve any issues and ensuring that the process remains on track.

Quick Tip:

Calculate an accurate lease extension with the Lease Extension Calculator.

In summary, a quality lease extension surveyor can provide valuable guidance, support, and expertise throughout the lease extension process. They can help you get a fair deal, avoid mistakes, and ensure that the process runs smoothly and efficiently. Be sure to choose someone with the necessary experience and expertise to ensure that you get the quality service you need.

Are you a tenant in the UK wondering whether your landlord is required to renew your lease when it expires? The answer is no, but there are certain circumstances where you may have a legal right to request a lease renewal or negotiate the terms of a new lease. In this comprehensive guide, we’ll explore everything you need to know about lease renewals in the UK, including the legal requirements, the process of renewing a lease, and how to negotiate a lease renewal with your landlord.

Section 1: Understanding Lease Renewals in the UK

Before we dive into the details of lease renewals, let’s first define what a lease is. A lease is a legal contract between a landlord and a tenant that outlines the terms of the tenancy, including the rent amount, the length of the lease, and any other terms and conditions. When the lease term comes to an end, the tenant may either move out of the property or request a lease renewal.

So, does a landlord have to renew a lease in the UK? The answer is no – landlords are not obligated to renew a lease when it expires. However, there are certain circumstances where tenants may have a legal right to request a lease renewal or negotiate the terms of a new lease.

Section 2: Legal Requirements for Lease Renewals in the UK

Under the Landlord and Tenant Act 1954, tenants with a “protected tenancy” have the right to apply for a new lease. A protected tenancy is a lease that meets certain criteria, such as the property being used for business purposes and the tenant having occupied the property for a minimum amount of time. If a tenant has a protected tenancy, they can only be refused a lease renewal if the landlord can prove certain grounds for opposition, such as intending to occupy the property for their own business use.

If a tenant has an “unprotected tenancy,” meaning their lease does not meet the criteria for a protected tenancy, the landlord is not required to offer a renewal. However, in some cases, the landlord may be willing to negotiate a new lease with the tenant if both parties agree.

Section 3: The Process of Renewing a Lease

If you have a protected tenancy, you have the right to apply for a new lease. To do so, you’ll need to follow the process outlined in the Landlord and Tenant Act 1954. This includes serving a Section 26 Notice on your landlord, which notifies them of your intention to apply for a new lease. Your landlord will then have a specified period of time to respond and either agree to the new lease or provide grounds for opposition.

If you have an unprotected tenancy and wish to renew your lease, you’ll need to speak with your landlord and negotiate the terms of the new lease. This may include discussing the rent amount, the length of the lease, and any other terms and conditions.

If you want to calculate your lease, then click Lease Valuation Calculator to get the most relevant valuation.

Section 4: Negotiating a Lease Renewal with Your Landlord

If you have an unprotected tenancy and wish to renew your lease, it’s important to approach your landlord with a clear idea of what you want. This may include the length of the lease, the rent amount, and any other terms and conditions you wish to include. It’s also a good idea to research similar properties in the area and compare rental rates to ensure you’re getting a fair deal.

When negotiating with your landlord, be prepared to compromise and be flexible. Your landlord may have their own requirements and limitations, and it’s important to find a middle ground that works for both parties.

To know the key difference between lease renewal and lease extension. Click the link.

Due to the terms of the lease, purchasing and selling a leasehold apartment can be a time-consuming process. When trying to buy one, ground rent exceeding £250, short leases, and flats with a section 20 notice can be quite stressful and slow down the process.

In this post, we’ll examine what a section 20 notice is, what it means for leasehold apartments, how to object to one, and whether you should still acquire an apartment if one has been served on the building.

Our lease extension experts can guide you through with efficiency.

What Are Section 20 Works?

When there are significant repairs or maintenance needs for the leasehold property, the landlord is required to serve a section 20 notice under the landlord and tenant act. Alternatively, it can be served if the landlord wishes to sign a long-term contract to maintain system doors, fire alarms, etc.

These are works that haven’t been budgeted and can’t be financed by the sinking fund that the landlord should hold from all leaseholders, and a section 20 notice is typically given in addition to your yearly service charge.

Objecting To A Section 20 Notice

When the landlord serves a section 20 notice, they are expected to give you a complete spec of the indicated works and quotations from the contractors they are considering.

Then, each leaseholder typically has one month to react to this notification, choose an alternative contractor, and request documentation of the necessity of the repair.

It is beneficial to invite a few contractors over to offer advice, assess the work, and provide bids. Additionally, you ought to perform due research on the freeholder, the management firm, and other entities operating under different names.

Request to see all invoices, receipts, and copies of accounts if the landlord refuses to disclose this information.

This request must be made in writing to them so that there is a paper trail with dates. You can take them to a first-tier tribunal if they refuse to give you all of this information and you have sufficient proof that the agents are not doing their duties properly, overcharging, charging for arbitrary expenses, etc.

However, you must ensure that everything is documented and that your argument is supported by solid proof. Before taking any action, you should speak with a leasehold solicitor and join forces with other leaseholders to establish a stronger case.

Should I Buy A Flat With A Section 20 Notice

You shouldn’t blatantly invest in a section 20 notification without first understanding the circumstances.

A section 20 notice need not always be detrimental if it is part of a long-term contract; however, there have been instances in which lawyers have suggested that because the notice is part of a long-term contract with contractors for the upkeep and repair of the building and grounds, major work and high costs aren’t involved. Once these people acquired ownership of the houses, they discovered that they had been given a work estimate in the tens of thousands of pounds. None of this came up during the court case.

If you’re in the process of purchasing a flat that has a section 20 notice, you must be aware of all of its implications. If the present leaseholder wants the sale to go through, it would be preferable if they paid it in full upfront. Alternatively, request a price reduction based on the section 20 notice’s costs.

Additionally, if there is an unpaid section 20 notice, your mortgage lender may have problems with you because it may hinder your capacity to repay the loan.

If you decide to accept the section 20 notice because you genuinely love the apartment, you won’t likely see an improvement in the value of your home when the renovations are finished, thus spending the full amount on both the renovations and the repairs would merely deplete your investment.

Since the sellers won’t find a better offer elsewhere and all other prospective purchasers will be dealing with the same problems, asking for a price reduction may be successful.

In conclusion, based on my personal experience owning a leasehold apartment, I would steer clear of anything that screams “Section 20” because it will only lead to difficulties and cost extra money right away.

As your solicitors won’t do this, you should also conduct your research on the landlord and managing agent beforehand. Given that there are so many parties involved when purchasing a leasehold property, this is a crucial step.

For further questions related to lease extensions and property, contact one of our experienced chartered surveyors at Leasehold Valuations.

What does rent in arrears mean?

This phrase denotes an overdue rent payment. This may be for a missed payment for the entire month. Rent payment frequency and amount are determined by the tenancy agreement outlined at the start of the tenancy, and being in arrears indicates a breach of that agreement.

One of the most frequent worries that any landlord has is making sure that the tenants pay their rent.

We have put together this fast guide to dealing with arrears to assist you in staying on top of rent payments and ensuring you do not end up with any rent missing.

Our lease extension experts can guide you through with efficiency.

Record payments

Tenants must keep a record of when rent payments are due and when they have been paid.

According to the Landlord and Tenant Act of 1985, the landlord must supply a rent book or other comparable document for use to the premises “when a tenant has the right to occupy premises as a residence in consideration of a rent due weekly.” But for tenants who make monthly rent payments, we advise you to follow a similar procedure.

If it becomes necessary to initiate possession procedures, you must give your landlord and the court an account of rent.

Contact your tenant

If your tenant doesn’t pay the rent when it’s due, we suggest getting in touch with them the day after it’s due to remind them of the payment’s deadline and request that it be made right away
If tenants don’t return your calls, texts, or emails and/or the rent is still owed, get in touch with them once again
Your letter should

• Verify the amount owing and request that they pay it right away, or get in touch with you if they are unable to do so and need more time or want to work out a repayment schedule
• Make sure that all upcoming payments are made on schedule and in full.
• Describe the possible consequences of unpaid debts continuing to accumulate and/or not being paid.

Contact the guarantor

If your tenant has a guarantor, you should get in touch with them to let them know that a rent payment has been missed and ask them to make a payment. This depends on what is specified in the leasing agreement.
Once more, explain to them what will probably occur if arrears are not paid and/or are allowed to accumulate.
In many circumstances, the guarantor will answer if the tenant doesn’t.
We advise getting legal counsel about your rights and what steps you can take to regain control of your property if rent isn’t paid for more than two months.
Notwithstanding the complexity of the regulations governing landlord-tenant relationships, you must be informed of your rights and uphold your obligations.

Landlord insurance for rent arrears

To protect themselves from tenant debt, many landlords decide to purchase a specific coverage designed for landlords. In addition to paying the legal costs incurred in recouping delinquent rent.
Although landlord insurance cannot make your tenants pay their rent on time, it can provide you some comfort in knowing that the costs of going to court to recover unpaid rent are covered.
For further questions related to lease extensions and property, contact one of our experienced chartered surveyors at Leasehold Valuations.

The leaseholders serve the freeholder with the Section 13 Notice under the Leasehold Reform, Housing and Urban Development Act 1993, also known as an Initial Notice, to exercise their collective enfranchisement rights (buying your freehold). This is distinct from the Section 13 notice that a landlord serves on a tenant to raise the rent.

For further questions related to Lease extensions and property, contact one of our experienced chartered surveyors at Leasehold Valuations.

A Section 21 Counter-Notice must be served on the freeholder in response to the Section 13 notice.

What steps should you take before serving the Section 13 Notice?

• Check your eligibility
• RICS Freehold valuation – you need to value the freehold to:
  • Know whether the participating leaseholders can afford to buy the freehold as a group;
  • ○ limit the risk of serving an inaccurate premium in the initial notice, which, if disputed by the landlord, can cause a delay in the process and additional negotiation costs with the freeholder.
• Select your nominee purchaser(s).
• Inform your freeholder or (if applicable) the intermediary landlord of your plans and confirm that they are not absent. NB This also ensures that you serve notice on the correct person/entity. If you don’t, your notification may be rendered null and void.

Choosing the Nominee Purchaser

If the process is completed, the Nominee Purchaser, as indicated in the Initial Notice, receives the freehold and becomes the new landlord.
You should decide who this is early on because they will become the building’s manager. If you opt to form a corporation, it must be formed and incorporated before serving your section 13 notice.
You and the other participating tenants can choose who the Nominee Purchaser is. They can, for example, be:

• a person;
• one of the tenants;
• a corporate person/external corporation;
• a trust; or
• a company formed for the tenants. – This is the most frequent option since it allows a group of leaseholders to run the company and share the duty of preserving the freehold and adhering to the requirements of the freeholder.

What’s in Section 13 Initial Notice?

1. Full names and addresses of:
   • the eligible tenants who are serving the Section 13 Initial Notice;
   • ALL qualifying tenants;
   • the landlord/freeholder and any intermediary landlords;
   • and the Nominee Purchaser/s
2. Details of the property for which you intend to purchase the freehold, including a plan and any relevant descriptions;
3. Details of any further freehold interests you desire to purchase;
4. Rights to be required – this includes things like vehicular access, rights of way, and access to drainage; all of these things should be fully specified and marked using plan diagrams.
5. The basis for your claim. This is where you must state the facts that make your case eligible, such as the fact that 2/3 of the apartments are rented by qualifying tenants, and so on.
6. Details of all leaseholds to be purchased ;
7. Specifics on any mandatory leasebacks. This refers to any leaseholders who have the right to continue their leases, such as those with secure tenancies, and whose leases must be honoured by the Nominee Purchaser once the procedure is completed – the current freeholder may have an obligatory leaseback.
8. The suggested price for the freehold and any other interest/s that the qualifying purchasers seek to purchase;
9. The date by which a counter-notice must be served (at least two months after the Section 13 Initial Notice but no more than six months after); and
10. At the end of the notification, the Nominee Purchaser/s and ALL of the qualified tenants must sign.

First, ensure that you and your fellow leaseholders are entitled to purchase your freehold.

The collective enfranchisement procedure is extensive, and there are various conditions to meet before serving a Section 13 Initial Notice under the Leasehold Reform, Housing, and Urban Development Act of 1993.
You should also keep in mind that you must select a Nominee Purchaser to represent the interests of all participating eligible freeholders, which is essential for the Section 13 Notice to be served.

Serving a Section 13 Notice correctly is critical!

A conveyancing solicitor who has worked with leaseholders who want to buy their freeholds understands that a Section 13 Notice issued on a landlord/freeholder must be complete and error-free.
If your landlord/freeholder identifies flaws in the notice, they can seek to have it dismissed, which means that not only will your application be halted, but you will also be barred from making another application for 12 months.

What happens next?

Assuming they do serve this notice, you may reasonably expect that if you’ve engaged the proper professionals, the counter-notice will usually agree to your claim, and you can then focus on agreeing the premium, compensation, and final conveyancing required for the process to be complete.

• After your solicitor has issued the notice, you must pay your landlord’s reasonable fees, which typically include the cost of their freehold appraisal and legal representation
• If your landlord does not agree with your claim, they must explain why in their counter-notice, and you or they have the right to take the matter to the First-tier Tribunal within at least 2 months but no more than 6 months (Property Chamber). You must pay a small fee to use this court, but after that, your landlord must pay all of their own fees, which frequently convinces the freeholder to become a bit more realistic with the premium they are seeking.

LeaseholdValuation specializes in leasehold valuations, lease extensions, and enfranchisement. Have a quick 10-minute free consultation with one of our RICS experts.

Leaseholders have the right to have their lease extended if they meet certain eligibility criteria. This right is outlined in the Leasehold Reform, Housing, and Urban Development Act of 1993, which allows leaseholders to extend their lease for an additional 90 years. A notice must be served on the freeholder or landlord to begin the statutory leasehold extension process. This Notice is also referred to as the Section 42 Notice or the Tenant’s Notice. This guide summarizes everything you need to know about Section 42 Notice.

Our experienced chartered surveyor gives his advice on the six top leasehold issues.

Definition: Section 42 Notice

A Section 42 Notice is a formal request from a leaseholder to a freeholder. The ground rent is reduced to a peppercorn in addition to the right to a 90-year lease extension. A leaseholder pays a small amount of peppercorn rent (£1 per annum) to satisfy a legal agreement between them and the freeholder. The Notice also includes a proposed premium for the lease extension allowance. The freeholder or landlord must respond with a Counter-Notice within two months of receiving a Section 42 Notice. A Counter-Notice indicates whether the freeholder accepts or rejects the lease extension.

Eligibility: Serve Section 42 Notice

If the leaseholder is eligible for the formal lease extension, there are very few reasons that a freeholder can reject a served Section 42 Notice. However, they may reject the Notice based on the premium offered or if the leasehold is ineligible for the lease extension. You are qualified to serve a Section 42 Notice on a freeholder if and only if you meet the following criteria:

• You’ve owned the property for at least two years.
• The initial lease was granted for more than 21 years
• The property for which you want to extend your lease is not commercial or business property.

Contents: Section 42 Notice

The Leasehold Reform, Housing, and Urban Development Act of 1993 specifies the contents of the Tenant’s Notice. Section 42 Notice must include the following elements, according to the Act

• The tenant’s full name and the address of the property for which they want to extend their lease.
• The terms of the tenant’s first lease. These include the lease’s date, the lease’s terms, the lease term, and the date the lease term began.
• The proposed premium is payable to the freeholder in exchange for granting a lease extension for the subject property.
• The tenant’s proposed terms for the proposed lease extension.
• Details of the tenant’s appointed solicitor, including the name and address in England and Wales where future notices may be served.
• The date on which the tenant wishes the landlord or freeholder to serve a Section 45 Counter Notice in response to the Section 42 Notice. This date, however, must be more than two months after the Counter Notice was served.

Concerning the Section 45 Counter Notice

While the Section 42 Tenant’s Notice initiates the lease extension process, it is the Freeholder’s Counter-Notice that determines the extension’s progress. When served with a Section 42 Notice, the freeholder may respond in one of a number of ways via the Counter-Notice:

• Accepting the request for a lease extension and agreeing to your terms.
• Accepting your lease extension request, but only if you agree to different terms.
• Refuse your request due to the landlord’s claim to redevelop the flat.
• Reject your request due to ineligibility for statutory lease extension requirements or flaws in your Section 42 Notice.

It is unusual for a freeholder to reject the Tenant’s Notice. This is because rejecting a Section 42 Notice may result in severe legal consequences for the landlord. These may include a court order to agree to the leaseholder’s terms or even losing control over the lease extension premium. When a freeholder accepts your request on the condition that you agree to new terms, it is often a ploy to open the door to further negotiations.

When it comes to lease extensions, the Section 42 Notice is an important document. Any flaw discovered on it can thus be used to dismiss it in a court of law. When your Section 42 Notice is dismissed in court, it means that your lease extension request has been halted. The worst consequence of a rejected Section 42 Notice is that you will be unable to apply for a lease extension for another 12 months. This is why you should think about hiring a professional lease extension lawyer.

The Advantages of Using a Solicitor to Serve a Section 42 Notice

A Section 42 Notice can be served by yourself. Getting assistance from an expert solicitor, on the other hand, has numerous advantages, including:

1. Experience and Expertise -Serving an incomplete and inaccurate Section 42 Notice is one of the reasons why the Notice can be dismissed in court. Lease extension lawyers have served numerous notices for a variety of clients. As a result, they are familiar with the common flaws and errors that can result in the rejection of a notice. You can be confident that your Section 42 Notice will be served flawlessly if you use a solicitor. Due to the legal participation of a solicitor, the likelihood of the lease extension being granted by the freehold is also high
2. Notice-Follow Up – Solicitors can assist you in following up on the freeholder’s Counter-Notice. If the freeholder fails to serve a Counter-Notice, solicitors will advise you on the best course of action to take.
3. Legal Advice The entire process of serving a Section 42 Notice is a statutory procedure. A lease extension solicitor provides you with the legal advice and assistance you need when serving the Tenant’s Notice. They will clearly explain the legal procedure for serving the Notice and will advise you on all of the details that should be included in the Section 42 notice before you can finally serve it to the freehold.

The Section 42 Notice Service Procedure

The following is a step-by-step guide to serving a Section 42 Notice.

1. Lease Premium Valuation – The calculation of determining how much you will pay a freeholder for the lease extension is known as premium valuation. A Section 42 Notice should include information about your proposed lease extension premium. This premium should be valued by an RICS valuer who is specialised in this field. RICS valuers are experts at estimating the cost of a long-term lease. Your premium should not be too low. A low premium valuation is grounds for the freeholder to reject your Notice.

The following are the reasons why you should hire an RICS valuer:

1. • They will advise you on the best premium to include in the Tenant’s Notice.
   • They assist you in determining the possibility of a premium in all circumstances.
   • You will be assisted by the valuer in responding to the freeholder’s Counter-Notice.
   • During negotiations with the freeholder on the payable premium, the valuer deals with all matters, until a resolution is finalised.
2. Check to See if You Can Afford the Proposed Premium – As compensation for the lease extension and loss of ground rent income, you will be required to pay a premium to the freeholder. As a result, you should assess the premium valuation highlighted by your valuer to determine whether you can afford to make such a payment. Once you’ve determined that you can afford the premium, you can hire a solicitor to assist you in serving your Notice.
3. Hire a Solicitor – A professional solicitor will assist you with the remaining stages of serving a Section 42 Notice, which includes the following;
   • Obtaining the necessary information to demonstrate identity, address, and financial ability to pay the premium.
   • Obtaining a duplicate of your lease.
   • Checking your eligibility for a lease extension.
   • Obtaining the freeholder’s or landlord’s home address.
   • Obtain the contact information for the freeholder’s lawyer.
4. Section 42 Notice Drafting – Your lawyer will also deal with the drafting a Section 42 Notice. The draught must include all of the elements required by the Leasehold Reform, Housing, and Urban Development Act of 1993. Once they have finished drafting the Notice, you will be required to sign it in the presence of a signature.
5. Serving the Notice – The Section 42 Notice is ready to be served to the freeholder’s address once it has been drafted and signed. Your solicitor should handle this via special delivery or courier. This is to ensure that the freeholder has received and signed the Notice. It is critical to note that the cost of delivering the Notice is your responsibility. The landlord may also require you to send proof of your lease extension eligibility.

For more queries related to the length of the remaining lease and how much any lease extension may cost, have a lease extension valuation undertaken by an expert lease extension valuer.

What Happens After You Serve a Section 42 Notice?

The landlord has two months to respond to your request after you have served the Tenant’s Notice at the freeholder’s address and they have acknowledged receipt. The landlord’s response is captured in the Counter-Notice, with the landlord indicating his or her interest in the request. If the freeholder has rejected your Notice without giving any reason, you have the legal right to apply to a court for a Vesting Order.
If your landlord accepts your Tenant’s Notice and all necessary negotiations are completed, your solicitor will complete the new lease and deal with registering the Section 42 Notice with the Land Registry. However, you will be required to pay before this is done, such as the new lease premium, professional fees, ground rent, stamp duty, and other service charges.

Section 42 Notice Time Limits

• Section 45 Counter Notice Issuance – By law, the freeholder must serve his counternotice within two months of receiving the Tenant’s Notice. Their response should be in the form of a formal document known as a Section 45 Counter-Notice. The freehold should clearly state in this document whether they have accepted the terms of a lease extension or have declined the lease extension request. If they reject the leasehold’s section 42 notice, they must state all valid reasons for the rejection in the counter-notice, as allowed by law.
• Confirmation of Eligibility – The landlord may request proof of lease extension eligibility. They do, however, only have 21 days to request this confirmation. The leaseholder is then given 21 days to respond to this request.
• Inspection Notice – The freeholder has the right to inspect the property in question to determine its worth. This procedure, however, requires a 3-day notice and must be done in writing.
• Rejection of Tenant’s Notice – The freeholder has at least two months, but no more than six months, to provide reasons for rejecting your Section 42 Notice. During this period your surveyor will try and negotiate with the freeholder’s surveyor to reach an amicable agreement on the premium.

Section 42 Notice Fees

The fees for drafting and serving a Section 42 Notice vary depending on the solicitor. Here are some ballpark figures to help you plan your conveyancing budget.

• Valuation of a Lease Extension by a Qualified Valuer – £500 to £1000
• Leaseholders Solicitors Fee – £500 to £800 Per Person Online ID Fee – £8
• Solicitor’s Fee for the Freeholder – £800 to £1500
• Obtaining a copy of the lease for £3 Registering and copying title plans for each title for £6 Registering the Section 42 Notice at Land Registry for £20

Extra payments may also be required for services such as obtaining a Vesting Order, negotiating the lease extension premium, and completing the lease extension process. All of the cost estimates presented here include taxes.

We are aware that moving house can be an expensive process. And when the topic of a property survey is brought up, the thought of shelling out yet another expense could be a tough one to take. It feels amazing when your house offer is approved. But after that comes the chore of having the house surveyed. Given that some surveys are longer and more in-depth than others, it can be tempting to choose the one that is least expensive. But that might not be the best course of action for you or the property. Everything there is to know about a property survey is covered in this article. also explains the significance of property surveys.

However, failing to get your house examined by a qualified chartered surveyor could force you to pay thousands of pounds in unforeseen repairs. The examination will reveal building degradation and previously undiscovered flaws.

If you are looking for a lease extension in the UK, contact us for assistance. Our team of chartered surveyors can help you successfully negotiate your lease extensions or enfranchisement. Give us a call for a consultation today

What is a Property Survey?

A professional chartered surveyor will conduct a property survey. It is a thorough examination of a property’s state. They will often inspect the structure and state of the home you are purchasing or selling. The property is then examined by the surveyor. They will also let you know if the house has any issues.

We explain why we require property surveys and , how to obtain them,

1. Negotiation Power – Prior to exchanging contracts once your offer has been accepted on a property, it is crucial to order a survey. Property surveys ought to be carried out during the purchasing process since the data they provide can be a very effective negotiating tool. They will assist you in learning more about the building’s condition and provide you with a potent negotiating tool if faults are discovered, allowing you to convince the seller to reduce the asking price or to make repairs.

   Say you are willing to spend a little more than you had planned because you think the house doesn’t require any more maintenance or repairs. A survey will either support or refute this. You should be able to argue for at least some of the building repairs to be deducted from the property’s appraised worth. As an alternative, the seller might consent to make the repairs before your move-in in exchange for full payment. Additionally, in some situations, the asking price may already include these problems and repairs. If done quickly and by experts, surveys can also save time on conflicts and altercations.

2. Mindfulness and Deal-breakers – A survey can reveal structural issues or possible issues that you might have missed. And in the long run, this can enable you to save money. It could either convince you not to purchase the home at all or give you evidence to support any demands for improvements or price reductions before buying. It might cost you a significant amount of extra money and put you in a very difficult position if you pay a premium for a house without a survey, move in, and discover that it has a great number of concerns.

   Property acquisition can be nerve-wracking and risky, especially if the property will serve as your new residence. Even though the survey’s findings aren’t always good, at least you are fully aware of the risks and expenses involved before proceeding. Additionally, you have the option to cancel the sale if necessary if the survey is conducted before the transaction is finalized, which is typically the case.

3. Existing Improvements – The surveyor will often certify that the structures on your property and any other renovations, upgrades, or repairs made at the time of the survey do not contravene any laws or other restrictions.
4. Save money in the long term – You will only save money in the long run by identifying flaws and potential structural concerns in the building as soon as possible. Since purchasing a home is typically the single largest investment a person will make, it only makes sense to ensure that your purchase is high-quality and long-lasting.

Who carries out the property survey?

Highly qualified chartered surveyors conduct a property survey to assess the state of your property. An expert in property is a chartered surveyor. They generate a report so you can determine whether it is a wise investment or if there are any issues, such as dampness, structural problems, or anything else, that could provide problems in the future.
Buying the freehold of your property could be very beneficial. However, the process involved in purchasing your freehold is complex and confusing. Leasehold Valuations will guide you and advise you of your best options Feel free to call us at 01753 542984 for a free 10-minute consultation.

Over the last several years, there has been an increase in demand for affordable housing in the United Kingdom. As a result, some builders are building residences for purchasers on a reduced budget.

This is clearly excellent news, but it may come at a cost.

Keep an Eye on Things:

It's nothing new to sell a house as a leasehold, and it's not always a negative thing. It all depends on the leasing conditions.

Some property businesses, on the other hand, have sold leaseholds to other property companies. These businesses, according to The Guardian, have offered to sell the homeowners the freehold rights to their house for a premium sum. If the owner refuses, they can keep paying the ground rent, which increases every 10 years.

The lease on a new-build leasehold property is typically 999 years long, with a ground rent of roughly £295 each year.

Our lease extension experts can guide you through with efficiency.

Make sure you Receive Legal Guidance before Extending your Lease:

When a leaseholder is uninformed of their statutory entitlement to an extended lease, they may be forced to accept a terrible bargain from their landlord. The Landlord might give a lease period that is shorter than the statutory term, require the leaseholder to pay a higher ground rent that is often changed, or simply demand a payment that is substantially greater than what is could be if the leaseholder had proper professional advice.

In Fact:

As a result, some homeowners might find themselves between a rock and a hard place. They may either pay the escalating ground rent payments or a higher price for the freehold.
When one buyer acquired a leasehold house, they were informed they could buy the freehold for £2000 to £3000, according to Guardian Money. However, they were informed a few years later that the leasehold had been transferred to a new property business, which then requested £40,000 to purchase the freehold.

In conclusion:

When purchasing a home, read the fine print on all of your contracts with the seller. If you're buying a leasehold property, make sure you understand the contract's provisions and question your lawyer about the lease's long-term cost, the option of purchasing the freehold (and how much it would cost), and if your leasehold might be transferred to a third party.

For further questions related to lease extensions and property, contact one of our experienced chartered surveyors at Leasehold Valuations.