Browse our Leasehold Services Services
Bury & Walkers has significant experience in advising and representing individuals on leasehold legal issues. From problems with service charges, to arranging extensions to a lease, or negotiating over the legal right for leaseholders to collectively manage the block where they live. We can help.
Lease and Service Charge Disputes
A lease of a residential property will contain details as to how service charges are to be calculated and what obligations are to be undertaken by a landlord. The value of those service charges and whether or not a landlord has undertaken their obligations can be subject to disputes. We can assist lessees by carefully considering the terms of the lease in the context of the substantial laws and regulations which apply to leasehold property.
If you disagree with a charge made under your lease, are concerned that procedures have not been following properly by your landlord or that you landlord/agent has not undertaken their obligations correctly then please get in touch.
Lease Extensions
Lease Extensions – The Facts
You may think extending the lease on your flat is a torturous process however is isn’t always long and complex. We will look at the why? when? and how? to help simplify this process for you.
Why should I extend my lease?
As the term of your lease gets shorter the value of the lease decreases and the cost of extending the lease increases. Therefore, it is important you extend your lease at the right time before the cost substantially increases.
When should I extend my lease?
If your lease has less than 90 years to run you may want to start thinking about extending your lease, however if your lease has less than 80 years remaining you should take action now to extend your lease and protect your investment as each day you delay this process the premium is likely to increase.
80 years is referred to as the ‘magic number’. Once your lease has less than 80 years remaining the premium cost will increase substantially as Marriage Value will be taken into consideration. This is the increase in the value of the flat following completion of the lease extension, reflecting the additional market value of the longer lease – there is a complex, prescribed way of calculating this but don’t worry that’s for the surveyors to calculate!
You may also want to extend your lease if you are thinking about selling your flat as this could increase the market value and would be more attractive to potential buyers.
Lenders may not lend on a flat if the term remaining on a lease is below 80 years therefore you will be required to extend your lease if you are taking further borrowing or moving to a new lender.
How can I extend my lease?
There are two ways you can extend your lease – the informal route and the statutory route.
- Informal lease extension
If you know your landlord and have very good negotiation skills you can approach your landlord directly to negotiate terms of a lease extension. However your landlord is not obliged to agree your lease extension and can change his/her mind or the terms throughout the negotiation period.
- Statutory lease extension
If you are a qualifying tenant you have a right to extend your flat lease by a further 90 years and extinguish the ground rent. You would need to obtain a valuation and your Solicitor would serve a section 42 notice on the landlord to initiate the claim. The landlord would then serve their counter notice and the surveyors will begin negotiations.
How long will it take?
The whole process of extending your lease can take from 2 months to 12 months.
Do I need to instruct a Solicitor?
As mentioned above the shorter a lease the less valuable it is. Therefore, you should try and extend your lease before the term drops below 80 years. We advise you to instruct a Solicitor as soon as you decide you wish to extend your lease. Your Solicitor will deal with the notice, negotiations of the terms of the lease, completion of the lease extension and registration at the Land Registry.
Here at Bury & Walkers we have a wealth of experience dealing with lease extensions. We have acted for both the Landlord and Tenant and also the Management Company. Please get in touch for a free consultation.
Right to Manage
What is the “Right to Manage” (RTM)?
This is a statutory right given to you as a leaseholders to collectively (with the other leaseholders) manage the block. This right was introduced in the Commonhold and Leasehold Reform Act 2002 to empower leaseholders like yourself to take over the management of their block.
Why should I exercise the Right to Manage?
You may wish to exercise this right to ensure the effective management of your block. This process will allow you to remove any existing managing agents your landlord may have appointed.
How do I exercise the Right to Manage?
You do not need the landlords consent or a court order to exercise the right to manage, you don’t even need to show there has been any form of mismanagement. All you need to do is serve a formal notice on the landlord which Bury & Walkers LLP can assist you with.
What is the criteria to qualify to exercise the Right to Manage?
- The building must be a self-contained block of flats;
- The block must have no more than 25% of non-residential use;
- Two thirds of the flats that are let must be let to qualifying tenants who holds the flat under a long lease (for a term over 21 years);
- The participating qualifying tenants must represent 50% of the total flats in the building.
Do I need to set up a company to exercise the Right to Manage?
The short answer is yes.
The Right to Manage can only be exercised by a company and not individual leaseholders. The company must have Articles of Association to govern the running of the company.
Do I need to instruct a Solicitor?
We advise you to instruct a Solicitor as soon as you decide you wish to exercise your Right to Manage. Your Solicitor will be able to advise you on company formation, the notice, and making an application for an entry on the title at the Land Registry.
Here at Bury & Walkers we have a wealth of experience dealing with the Right to Manage. We have acted for both the Landlord and Leaseholders. Please call us for a free consultation.
Collective Enfranchisement
What is Collective enfranchisement?
Collective enfranchisement is the process of leaseholders joining together to buy the freehold of their block of flats. This process is sometimes known as Leasehold Enfranchisement or Block Enfranchisement. This has been a statutory entitlement since the Leasehold Reform Housing and Urban Development Act 1993 came into force.
We set out below a summary of the steps involved in the collective enfranchisement process. We can ensure that this process runs as smoothly as possible and provide you with advice and assistance in respect of each stage.
- Does the building qualify?
In order to exercise the right of collective enfranchisement the building must qualify and there must be enough qualifying tenants.
To qualify the building must:
- Contain at least 2 flats;
- At least two thirds of the flats must be owned by qualifying tenants (a leaseholder that holds a long lease with a term over 21 years);
- No more than 25% of the internal floor area of the building is used for non-residential purposes.
- Instruct a Solicitor
At Bury & Walkers LLP we can advise you if you are eligible for a collective enfranchisement claim and provide advice and guidance on the process.
- Participation Agreement
We can assist you in drafting a participation agreement for all the participating tenants to sign. This documents will govern joint actions during the process.
- Nominee Purchaser
The Nominee Purchaser is most company a company formed by the participating tenants. Bury & Walkers LLP can assist you in setting up this company and dealing with the paperwork involved.
- Get a valuation
You should now obtain a valuation. We can recommend a surveyor if you are unsure who to instruct. The surveyor will provide a full price range and the lowest price will be used on your notice.
It is important to use an experienced surveyor because the premium offered to the landlord must be realistic for the notice to be valid. There is a complex calculation used to calculate the premium.
- Serve a section 13 notice
Your Solicitor will draft and serve a section 13 notice on the competent landlord including the premium offered to the landlord and a date the counter notice must be served by (at least 2 months after the date of this initial notice). A copy of this notice will also be served on any other landlord and interested party.
(If your landlord cannot be found you can still exercise your right to a lease extension. Your Solicitor can make an application to the Courts.)
- The landlord serves a counter notice
The landlord must serve a counter notice by the date specified in the initial notice. The landlord will either agree the right to claim, not agree the claim or neither admit nor deny entitlement but state an application is made to the Court.
(If the landlord fails to serve a counter notice, or service is invalid your Solicitor can make an application to the Courts. The Courts will order the landlord to sell the freehold on the nominee purchasers terms.)
- Negotiate the terms
Following service of the counter notice admitting the claim your Solicitor and valuer will negotiate the premium and terms of the purchase with the landlords Solicitor.
- (Issue a claim at the Tribunal)
If the terms or the premium cannot be agreed, you or your landlord can apply to Tribunal for determination of the terms.
- Completion
Once the terms are agreed the transfer document will be drafted and sent to all parties for signing. Your Solicitor will also ask you for payment on account of the premium, legal costs and surveyors costs. Your Solicitor can then complete the purchase and register the same with the Land Registry.
If you are thinking about starting the collective enfranchisement process or would like any further information please call Bury & Walkers LLP on 0113 2444 227 for an initial free consultation.
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