Lease Extensions
Whether you’re a Shared Owner or a 100% leaseholder (you own your home outright) this section is home to lots of useful information for you extending your lease.
If you live in a shared ownership house...
You must use the voluntary route. You are entitled to purchase a new lease for an extra 50 years on top of the remaining term of your lease.
Alternatively, you could staircase to 100%, and acquire the freehold of the property. You would then own the property outright as the freeholder and your lease would no longer exist.
(Please note that some shared ownership houses are restricted to 80% ownership – please refer to your lease).
If you live in a flat and own it outright...
If you own 100% of your flat then you can use either the statutory or voluntary process.
If you live in a shared ownership flat...
If you own a share in your shared ownership flat and have not staircased to 100%, you can only use our voluntary process.
The Statutory Process
The Statutory Process
(Inside Of The Terms Of The Act)
The statutory process is complicated and legally demanding. If you are considering this route, we recommend you take independent legal advice and appoint a solicitor to advise you upon the terms, to approve the new lease and complete the legal work for you. The timeframe of the procedure inside of the terms of the Act is laid down by the Act and is quite lengthy.
What is the procedure?
Lease extensions through this statutory procedure start when your solicitor serves a formal notice under the Leasehold Reform, Housing and Urban Development Act 1993 (the 1993 Act) on Town & Country Housing (this is called a Section 42 Notice).
The Notice must include the amount you are offering to pay us for the extension and any different terms you would like to include in the new lease. As there is limited ability to vary the terms of your lease, we advise that you obtain independent advice before serving the Notice. Your solicitor must ensure that the Notice is served in a valid form.
When you serve a Notice, you start a timetable which gives us two months to respond to you by serving a Counter Notice. We will engage a RICS accredited Independent Chartered Surveyor to value your property and assess your proposals. If we disagree with your proposals for the lease extension, the terms for the premium and lease terms will be set out in that counter notice. We would then try to resolve any disagreement by negotiation. Once terms are agreed, a new lease is entered into.
Please note...
In line with The Money Laundering, Terrorist Financing and Transfer of Funds (information on the Payer) Regulations 2017, as a regulated profession, we are duty bound to carry out due diligence on any of our residents carrying out lease extensions.
Rather than traditional methods in which you would have to produce multiple utility bills and a photographic ID we use an electronic verification system. This system allows us to verify you from basic details using electronic data. It is not a credit check of any kind so will have no effect on you or your credit history.
By completing the verification, you understand and agree that we will undertake a search with Credit Referencing Agencies for the purposes of verifying your identity. The Credit Referencing Agencies may check the details you supply against any particulars on any database (public or otherwise) to which they have access. They may also use your details in the future to assist other companies for verification purposes.
A record of the search will be retained for 5 years in line with The Money Laundering, Terrorist Financing and Transfer of Funds (information on the Payer) Regulations 2017.
What if we can't agree on the amount to pay or different lease terms?
Should we be unable to agree, the statutory rules allow the First Tier Tribunal (Property Chamber) to decide on the price you pay and the terms of the new lease. Each party would be responsible for their own costs for an application to the Tribunal.
What will it cost to buy a lease extension?
You will have to pay us a premium to extend your lease. This is calculated in accordance with rules set out in the 1993 Act. You will need to obtain valuation advice from a valuer who specialises in lease extension work to assist you in working out the premium. Alternatively, the Government sponsored website at www.lease-advice.org contains a very good plain English guide to how the lease extension process works under the terms of the Act. There is also a calculator on this site you can use to obtain a rough idea of what the premium is likely to be.
In addition to this you will have to pay
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- your legal and valuation costs
- our reasonable legal and valuation costs
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You will need to pay these costs even if you commence the procedure and decide not to carry on.
Where can I get advice from?
It is very important to obtain independent legal advice before commencing an application to extend your lease. You can obtain free and independent advice on the legal procedure from www.lease-advice.org. They will not, however, deal with the purchase of the lease extension on your behalf, you will need to instruct your own solicitor.
If you wish to proceed with an application to extend your lease using the statutory process, please ask your solicitor to serve a Section 42 Notice to:
The Homeownership Team, Town & Country Housing, Monson House, 1 Monson Way, Tunbridge Wells, Kent, TN1 1LQ
or email it to us homes@lovelivinghomes.co.uk
Love Living Homes is the trading name of Town & Country Housing, Monson Road, Tunbridge Wells Kent TN1 1LQ
The Voluntary Process
The Voluntary Process
(Outside The Terms Of The Act)
Flat owners who have not staircased to 100% (i.e., are still shared owners) are not eligible to extend their lease through the statutory process as they do not meet the qualifying conditions. However, we appreciate that such leases are reducing in term and may be becoming more difficult to re-mortgage or sell.
Town & Country Housing therefore have a voluntary process to allow such flat owners and also those 100% leaseholders who do not wish to use the statutory process, to apply to us to extend their lease once they have owned the property for 6 months or more.
In order to provide as much clarity as possible to the voluntary process, we have negotiated fixed legal and valuation fees for lease extensions undertaken outside of the terms of the Act. These are as follows:
In the draft lease, our solicitor will address any areas of concern such as ensuring the lease is compliant with the Mortgage Lenders handbook, ability for Landlord to insure, reasonable Notice fees, ability to recover services provided etc. This will be with a Deed of Variation of the lease. Should you decide not to proceed, you will still be liable for our solicitors fees for any works already undertaken..
Please note if the Lease requires a Deed of Variation the process could take longer than expected, as this process requires additional Legal review and agreement from both parties. Completion time scales can vary based on Solicitors workload and negotiations.
The below is a guideline of timescales.
Completion of a straightforward voluntary lease extension can take approximately 3 months under typical circumstances but may extend to 6 months if queries are raised and changes required. Lease extensions requiring a Deed of Variation are more likely to take 6-18 months
If you wish to proceed with an application to extend your Lease using the Voluntary Process, please complete the online form.
Complete our Application for Voluntary Lease Extension Form
These Are Guideline Figures (and Subject To Change)
| Service | Estimated Fees |
|---|---|
| Valuation fee and administration fee (payable in advance) These fees are non-refundable |
£550 + VAT (£660.00)
(Valuation £350 and non-refundable Administration fee £200 plus VAT) These fees are non-refundable |
| TCH Legal costs (payable on completion) |
Statutory route estimated to be in the region of: £850 + VAT (£1020.00)
Voluntary route fixed fee: £450 + VAT (£540.00) Plus disbursements for both routes. |
| Nominal legal fee towards the cost of rewriting the shared ownership lease (for shared owners only) | £100 + VAT |
| Any Consent to Deal fee charged by any Mortgagee to whom Town & Country Housing has charged the property | TBA |
| Premium | Determined by the independent specialist RICS Chartered Surveyor |
| Your own solicitor’s costs | Please make your own cost enquiries but we do recommend that you appoint a solicitor who has experience in dealing with lease extensions |
Apart from the valuation fee and the non-refundable administration fee, all costs are payable at completion of the transaction. Therefore, the only variable cost using the voluntary process is the premium payable for the lease extension and any Consent to Deal fee charged by the Association’s Mortgagee (if any).
The premium is determined by an independent specialist RICS accredited Chartered Surveyor using standard calculation methods.
Subject to the agreement of the premium and an undertaking to pay the fixed legal and administration costs, in principle Town & Country Housing would be willing to extend the lease of your property under the voluntary process on the same terms as those you would be entitled to under the 1993 Act.
This means the grant of a new lease for a term of 90 years on top of the remaining term of your existing lease. Whilst the Ground Rent provisions within your lease will be reduced to a peppercorn, for shared owners the provisions relating to payment of specified rent (the rent paid on the share owned by Town & Country Housing) will continue.
We would advise you to take independent legal advice as to the level of premium to be paid for the lease extension and the terms to be included in the new lease. We would also advise you to visit the Leasehold Advisory Service website www.lease-advice.org for an explanation of how the lease extension process works when conducted inside of the terms of the Act.
House owners who have not staircased to 100% (i.e., are still shared owners), please contact us for further details.