Share of Freehold Lease Extension: Process, Costs, and Considerations
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Embarking on the journey of extending your share of freehold leases requires a thorough understanding of the process, associated costs, and crucial considerations. This comprehensive guide aims to demystify the complexities involved, offering valuable insights for homeowners seeking to navigate this pivotal aspect of property ownership.
The Share of Freehold Lease Extension Process
1. Agree with Share of Freeholders
Collaborate with fellow freeholders to initiate the extension process, emphasising consensus.
2. Instruct a Solicitor
Engage the services of a solicitor to craft a new lease, ensuring a seamless and informal extension.
3. Draft Deed of Substituted Security (if applicable)
If a mortgage is in place, facilitate compliance by drafting a Deed of Substituted Security.
4. Submit and Sign
Present the new lease for signatures, involving both shares of freeholders and the leaseholder.
5. Surrender and Land Registry Submission
Formalise the extension by surrendering the old lease and submitting the new lease to the Land Registry for official registration.
6. Navigating Complexities
Understand potential challenges, especially when the share of freeholders is in disagreement or if one is absent, requiring a vesting order.
Why Extend Your Share of Freehold Lease?
1. Increased Value
Elevate the value of your individual lease through a well-executed extension.
2. Remortgage Facilitation
Facilitate remortgaging opportunities, a hurdle with a ‘short’ lease.
3. Improved Sale Potential
Enhance the property’s appeal for potential buyers, streamlining the sale process.
How to Best Prepare for the Extension
1. Secure Share of Freeholders’ Agreement
Obtain unanimous agreement from other share of freeholders before proceeding.
2. Joint Solicitor Appointment
Confirm the joint appointment of a solicitor to represent both freeholder and leaseholder, minimising legal costs.
3. Lease Extension Terms
Clearly define the desired lease extension terms, including considerations like 999 years and peppercorn rent.
The Extension Process in Detail
1. Undertaking from Share of Freeholders
Secure a commitment from other shareholders of freeholders for joint solicitor representation.
2. RICS Valuation (if required)
Consider a RICS valuation if a premium payment is anticipated, ensuring fairness in financial aspects.
3. Lease Format Options
Choose between an entirely new lease or a deed of surrender and re-grant, aligning with the specific requirements of the property.
4. New Lease Drafting
Entrust the solicitor to draft the new lease, ensuring uniformity in key aspects throughout the building.
5. Lenders and Mortgage Deeds
Comply with Land Registry requirements, signing a deed of substituted security or a new mortgage deed if applicable, ensuring lender consent.
Free Initial Leasehold Advice
Get expert insights on leasehold matters. Book an initial free consultation with our RICS Chartered Surveyors & Valuers for guidance on
- Lease extension
- Purchasing leasehold, freehold, or share of freehold
- Selling a leasehold property with a short lease
- Simultaneous lease extension and sale
Benefit from our specialised team, including RICS valuers for premium negotiation and surveyors for section 42 notice and formal or informal lease extensions.
Request a personalised quote for
- RICS Lease Extension Valuation,
- Section 42/13 notice serving,
- Negotiation support,
- Legal work completion,
- and Tribunal application for determining the premium.
- Secure your property journey with us.
Do you have to pay stamp duty on a lease extension?
While lease extensions are typically exempt from stamp duty, exceptions apply. Professional consultation is recommended for clarity on tax obligations.
How much time does it usually take to complete a share of a freehold lease extension?
With lender and share of freeholder consent, anticipate a timeframe of approximately (4-6 weeks), subject to individual circumstances.
What are the potential costs involved in extending a share of a freehold lease?
Costs vary widely, ranging from a few thousand to tens of thousands. An RICS freehold valuation is recommended for accurate estimation, factoring in legal fees, surveyor costs, and potential premiums to other freeholders.
What happens if your other share of freeholders refuse to allow your lease extension?
In case of share of freeholders’ refusal, be prepared for a formal statutory route, potentially involving court proceedings. Difficulties in locating other share of freeholders necessitate a Vesting Order, involving demonstrated efforts and adherence to time limits.
Navigating the share of the freehold lease extension process demands careful consideration and informed decision-making. Armed with insights into costs, essential steps, and potential challenges, homeowners can confidently navigate this crucial aspect of property ownership.