A leading Shropshire property litigation lawyer is urging flat owners to consider extending the term of their lease to protect their financial interests.
People who own the leasehold interest of a flat do so for a defined number of years, meaning its value reduces as the term of the lease gets shorter.
However, Stephanie Rushfirth, an associate at law firm mfg Solicitors, has warned that all residential leaseholders of flats have the right to extend their leases by a further 90 years, subject to certain qualifying criteria being met - urging them to do so sooner rather than later.
She said: “It is best not to wait too long to extend a lease as waiting will only make the process more expensive and may have an impact on your ability to sell-on a leasehold interest in the future.
“If flat owners wait until there is less than 80 years remaining on a lease, they will end up paying significantly more to the freeholder by way of a premium in return for the freeholder’s agreement to them extending their lease by a further 90 years.”
The process of extending a lease is set to be reviewed and reformed in future government legislation to make it less time-consuming and expensive.
However, there is no indication of when this might happen, whether there will be any challenges to the reforms or whether any of the proposed provisions will be watered down.
Ms Rushfirth has therefore advised flat owners to check how many years are left on their leases and seek the expert advice of specialist solicitors to ensure the process can get under way in good time to avoid paying a more expensive premium for an extension.
She added: “Although the lease extension is normally resolved without the need for issuing proceedings either at the County Court or at the First Tier Tribunal, this may be necessary if the freeholder fails to serve a counter-notice or if the parties cannot agree on the premium to be paid to the freeholder.
”There are however strict deadlines in this process and it is imperative that they are not missed, which is why it is so important to instruct a specialist solicitor to help.”
mfg Solicitors has offices in Birmingham, Kidderminster, Worcester, Bromsgrove, Ludlow and Telford.