I want to extend the lease on my flat, and have been reading about changes to leasehold legislation. Will the changes benefit my situation or should I wait?
This article was first published by City AM, Friday 19 October 2018.
The Law Commission has recently published a Consultation Paper on proposals for a major overhaul of the existing leasehold regime, where people who own property on a long lease may extend their lease or buy the freehold.
Among the proposals are several which could benefit you as a leaseholder looking to extend your lease, including:
- the removal of the existing requirement for ownership of the lease for the last two years in order to qualify for the right to a lease extension. Under the proposals, there would be no minimum ownership requirement;
- prescribing standard forms for bringing and responding to a lease extension claim, the aim being to simplify the existing procedure and reduce the risk of notices being invalid, and thus avoid wasted costs;
- streamlining the procedure for dealing with disputes and issues that arise during a claim for a lease extension. Under the proposals, these would be dealt with by the First-Tier Tribunal instead of split between the court and the Tribunal as under the current regime. The aim is for disputes to be resolved more quickly; and
- simplifying the way in which the premium payable for the new lease is calculated by prescribing a simple formula, with the aim of reducing the level of premiums and making enfranchisement easier, quicker and more cost-effective by reducing the professional costs involved in the valuation process. In addition, differentiating between the premium being paid by a homeowner than by an investor with a view to lowering the premium to a level that would not be attractive to any type of purchaser other than a homeowner.
The above is not an exhaustive list, but highlights some of the principal reforms under consideration that might benefit you as a leaseholder. Whether you should wait before claiming a lease extension depends upon your circumstances.
The number of years left on the length of your lease will be a significant factor. The proposed reforms are only provisional at this stage and a public consultation is ongoing. No date has been set for the publication of the Law Commission’s final report setting out its recommendations for reform, so it is a case of ‘watch this space’.