Through our experience we have developed a concept that ensures you obtain an extended lease for a reasonable premium and tries to save you legal and surveying costs. This concept also allows us to fix our prices so you know where you stand. Please see below for what makes us different.
If you have already agreed terms with your landlord and are looking for a solicitor to assist with the Deed of Variation/Deed of Surrender & Regrant see our Lease Extension (Deed Only) service.
The Lease Renewal Service that we have developed has been created from the fact that we have acted in litigation which has enabled us to take apart this very complex area of law (bearing in mind the Master of the Rolls described the governing Act as “inept”) and allowed us to create a streamlined and effective procedure that has the following benefits:
The procedure is usually carried out by two departments within a law firm (1) litigation (who serve the notices and deal with the First Tier Property Tribunal) and (2) conveyancing (who deal with the form of lease and complete the extension). This duplicates costs and we do not believe that dealing with one application between two departments is efficient or effective. For example your average litigator has little to do with the First Tier Property Tribunal and the schedule to the initial notice should include variances to the lease which a litigator may not be aware of. As a result with the Lease Renewal Service you deal with one fee earner which is not only more cost effective but that solicitor will be highly specialised in all matters concerning your claim whether to do with the conveyancing or potential disputes and the First Tier Property Tribunal application.
Since the Lease Clinic fully understands the full procedure in its entirety through acting in litigation and our substantial experience in carrying out hundreds of renewals, we are able to fix our prices at below those of our competitors.
At the core of the process is the First Tier Property Tribunal application which is included in our fixed price. Because the application to the First Tier Property Tribunal is included in our fixed price this reduces the “delaforce effect”. This is the additional amount that is often paid to a freeholder in lieu of the costs of taking a matter to the First Tier Property Tribunal. Unlike some firms who see the application as a last resort the Lease Clinic uses it to drive the application through. Although we are happy to work to your tempo we recommend that the application is made as soon as possible (the earliest date being 2 months from service of the counter notice) as opposed to using it as a last resort simply to protect a claim being withdrawn (6 months from service of counter notice). Once the First Tier Property Tribunal receives the application it will produce a timetable which ensures the application is dealt with quickly and does not become protracted.
The utilisation in our Lease Renewal Service of the First Tier Property Tribunal application also keeps the Landlord in check on not just only the premium but also costs and the terms of the lease. The fixed price offered does not include attendance at a hearing. This is because hearings are required very rarely (usually if one party is acting very unreasonably) but also it is possible to avoid attendance as the First Tier Property Tribunal will consider applications by way of a paper determination i.e by way of a letter. Writing a letter is far more cost effective at £200 plus VAT as opposed to attending a hearing which can cost in the region of £1000 plus VAT. This tactic is extremely useful in terms of determining the landlord’s costs which must be reasonable.
The Lease Renewal Service is a two part process involving a lawyer and a surveyor. The Lease Clinic therefore works closely and recommends surveyors to its clients, who are proposed not only on the basis of their expertise (which is clearly paramount) but also because they understand that all fees are to be made clear to the client from the outset and are to be reasonable.
We understand the benefits that can be derived from leaseholders making group applications for lease extensions and we have substantial experience in this regard. We therefore offer group discounts to encourage leaseholders to apply together. We are happy to arrange conferences with blocks of flats/estates to fully describe our Lease Renewal Service and we will also arrange for a surveyor to talk about their role in the procedure.
Interested in a group application? Contact us for more information.
For a fixed price of £1750 plus VAT and disbursements (also discounts for group extensions offered!) we will carry out for following work (although you can ask us to carry out just Stages 1 and 2 for a fixed price of £475 plus VAT):
Check that you are entitled to a Lease Extension
Draft and serve the Initial Notice on your Landlord (and any third party to your Lease)
Negotiate and agree the form of the new lease, costs and any other terms of acquisition with the Landlord (other than the premium which is the remit of your surveyor should you choose to instruct them) once the Landlord’s Counter Notice has been received
Apply to the First Tier Property Tribunal to protect your claim AND/OR to ask the FTT to determine a reasonable price for the lease extension AND/OR to ask the FTT to determine the landlord’s costs if they are unreasonable AND/OR to ask the FTT to determine the terms of the new lease if the landlord is being unreasonable AND/OR to expedite the process if the landlord is delaying
Complete the Lease Extension once all terms have been agreed and register it at the Land Registry
*Please note that in addition to your costs you will be liable for the Landlord’s reasonable legal and surveying costs which (as a guide) will be roughly similar to yours. You also have to pay the premium.
In our experience whilst you can attempt to agree terms with your landlord without following the statutory procedure, the landlord will usually use this to his advantage by:
(a) getting you to pay a premium at the top end of the scale (remembering valuing a lease extension is not an exact science and there is a range of premiums payable)
(b) pay a higher ground rent (under the statutory procedure no ground rent is paid – this is part of the premium you pay)
(c) varying the terms of the existing lease to their advantage (under the statutory procedure the amendments permitted are restricted).
This is unfair so our Lease Renewal Service uses the statutory procedure to its full extent to ensure you obtain a new lease for the best price and for the best terms.
Pursuant to the Leasehold Reform, Housing and Urban Development Act 1993 (the Act which gives flat owners the right to extend their lease) owners of a long lease (more than 21 years) who have been registered proprietors of their flat for more than 2 years and pay a nominal ground rent (for example £100 p.a) are entitled to extend their leases by 90 years on top of their existing term and reduce ground rent to nil (or one peppercorn as we say in the law).
In order to start the process we need to know the amount you wish to offer by way of a premium. In order to ascertain a “reasonable” premium to offer you should instruct a surveyor.
Once we have received your valuation advice from your surveyor the lowest possible (but justifiable) premium this is inserted into the Initial Notice which is the formal notice that commences your claim (known as a Section 42 Notice). The Section 42 Notice is then served on your landlord and, if applicable, any third party or a head leaseholder.
Your landlord has two months in which to respond with their Counter Notice (known as a Section 45 Notice) which will include the price they want for the new lease. Your landlord is also entitled to request a deposit of 10% of the premium you have stated in your Section 42 Notice which is payable within 14 days from the demand.
If the landlord does not serve a Section 45 Notice within two months from the date you serve the Section 42 Notice (which is unlikely) you can apply to the Court for an order that the new lease be granted on the terms of your Section 42 Notice (and importantly the new lease to be for the price you have stated in your Initial Notice which is will be the lowest justifiable premium).
If a Section 45 Notice is served by the landlord we negotiate the new lease costs and attempt to agree a price.
If a price cannot be agreed after two months from service of the Section 45 Notice then you have a window from this date until 6 months from the date of service to ask the First Tier Property Tribunal to determine the price. If this application is not made within 6 months from the Section 45 Notice you will have deemed to have withdrawn your claim. You will then be liable for the landlord’s costs, your own costs and will not be allowed to make a further claim for 12 months. To ensure you do not miss this deadline (and for other reasons detailed in ‘what makes us difference’) our fixed price includes this protective application.
Once all terms have been agreed to have a further 4 months to complete the Lease Extension (i.e pay the premium and the landlord’s legal and surveying costs). If you do not complete within 4 months you will have to make an application to the Court for a vesting order failing which your claim is deemed withdrawn. The price of this application is not included in our fixed price since it will be up to you to organise the finance to complete the lease extension within this time scale.
The Lease Clinic was primarily founded on the want to pitch our expertise in leasehold law to groups of flat owners in the hope that they work together. Why did we want to pitch to groups? In short, we have found that the old adage “strength in numbers” applies no more aptly than to leaseholders acting together within leasehold law.
The concept of landlord and tenant is an antiquated notion that has been abandoned or absent in most other jurisdictions. Its basic premise is heavily weighted towards the landlord. Indeed the very concept that you would have to give back your flat to the landlord after your lease has expired, despite paying market value for your flat, is an absurdity. A variety of leasehold law has been passed by the government to redress the balance in our system and it does so to some extent. However, for a leaseholder to act on their own to address his/her concerns is still a daunting task both psychologically (in terms of the stress of litigation and the procedure) and financially, especially with the average landlord having deeper pockets and often being used to litigation.
Yet despite the advantage afforded to landlords we have had the privilege in acting on some remarkable cases which, due to leaseholders working together, at the very least evened the playing field and in some cases turned the tables on the landlord.
Turning specifically to how working in a group can assist you with lease extensions, the first point to note is that strictly there is no such thing as a group application with each individual lease extension treated separately. However there is a substantial overlap in the legal documentation between each application which allows for costs savings. It is for this reason that we offer discounts to leaseholders working together.
Strength in numbers comes into play with the application to First Tier Property Tribunal to determine the terms of acquisition (i.e the premium and terms of the new lease). As leaseholders in the same building you can join in together in the same application. Importantly because each side pays their own costs in relation to the application you can share the costs with your fellow leaseholders. As a result you do not feel the pressure of having to concede to the landlord’s terms to avoid the cost of a hearing as would be the case if you were shouldering the cost by yourself. The concept of tenants over paying due to such pressures even has its own phrase and is known as the “delaforce effect” (stems from the case of Delaforce v. Evans, 1970).
If you would like us to give a no obligations presentation to your block about a group application for lease extensions please call us on 020 7485 0888 or email us at firstname.lastname@example.org
All of the information on how to instruct us should you wish to proceed is contained in our Lease Renewal Service Information Pack. Please contact us via the form below to receive a copy.