Make lease extensions easier, say experts
Will Housing Minister Esther McVey listen to ALEP's plea to drop the two-year rule?
A group of leasehold experts is calling on the government to make it easier for flat owners to extend their leases. The Association of Leasehold Enfranchisement Practitioners (ALEP) has written to Housing Minister Esther McVey, calling on her to review and improve flat owners? rights. In particular, the letter highlights the two-year wait rule.
This means that, as the law now stands, leaseholders must have owned their property for at least two years before they are eligible to extend their lease. ALEP argues that this is inconsistent with a flat owner's immediate legal right to join in with other flat owners to acquire the freehold of their building. Some flat buyers can avoid the two-year rule if the sellers had already qualified for a lease extension and had formally brought a lease extension claim - but they are in the minority.
The law allows eligible flat owners to extend their lease by an extra 90 years on top of the remaining lease term with the ground rents becoming a peppercorn (in other words, the rent is eradicated to zero). But as ALEP director John Midgely point out, the lease of a flat is a depreciating asset. If a new owner has to wait for at least two years to be able to exercise his or her rights, it could cost them a significant sum to extend their lease.
Leasehold legislation (including lease extensions) are under review as part of the government?s pledge to reform the leasehold sector. But any reforms are likely to take time to come into force. ALEP thinks modifying the two-year rule is a modest change that could hugely benefit flat owners and wouldn?t be difficult to implement quickly, hopefully as part of a future Housing Bill.
At Ringley, we?re in favour of any rule change that makes it easier for leaseholders to extend their leases. We know the current system can be complex for flat owners to understand and so we offer advice on lease extensions via Ringley Law. Our solicitors can take leaseholders through the process to make it as simple a possible and get the best value from your property. We also have an E-book available to download on our website that explains the lease extension process in detail.
So if your lease is coming up to the crucial ?80-years unexpired? in the next year or two, check out the lease extensions information on our website, download the guide and give us a call if you need more information.
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