Commercial property can be a fantastic investment and help elevate your business even further. In this article, Hannah Martin outlines everything you need to know before taking the plunge.
Frettens is one of the few firms in the region that have a specialist, dedicated Lease Extension and Enfranchisement Team.
Niki Adkins heads our team of experienced professionals who specialise in helping people with the lease of their flat. The team are based in Ringwood but deal with matters from all over the UK, such is their reputation.
It is generally a good idea to extend your lease sooner rather than later and certainly before the unexpired term falls below 80 years, if possible. This is because as the term of years left on the lease reduces, the value of your flat reduces, but the value of the landlord’s freehold interest increases. A lease extension can therefore enhance the value of your property and assist with its future saleability.
Mortgage lenders are becoming increasingly picky about the properties that they will lend on and short leasehold properties and ground rents are particular issues. A number of lenders now refuse to lend on properties with less than 80 years un-expired or where ground rents are not at a reasonable level. Generally, the sooner you extend your lease the cheaper it will be as the premium payable for a lease extension increases as your lease gets shorter.
A procedure where a group of leaseholders in a block of flats force their freeholder to sell to them the freehold of the building.
The legislation governing this transaction is the Leasehold Reform, Housing & Urban Development Act 1993. Generally, the sooner you purchase the freehold the cheaper it will be. The premium paid in an enfranchisement increases as the flat leases get shorter.
Subject to certain criteria, a group of leaseholders have a right to force the transfer of the management functions in their lease to a special company set up by them - the Right to Manage company. The right was introduced, not only as a means of taking control of bad management, but also to empower leaseholders, who generally hold the majority of value in the property, to take responsibility for the management of their block.
Before a landlord can sell his freehold title or his building containing flats providing certain criteria is met he must, by law, offer it to the flat owners before offering it on the open market.
Formal notices must be served by the landlord on the tenants telling them that he is intending to sell the freehold and the sale price and provide a deadline in which the flat owners have to serve a notice accepting his offer. During the time period between the landlord serving a notice saying he is selling and the date the flat owners can accept the offer the landlord cannot sell to another party, at a price less than that proposed to the flat owners.
If the landlord sells without first offering the freehold to the flat owners they can serve a notice on the new owner requesting information about the sale with a view to forcing the new owner to sell the freehold to the flat owners upon the same terms that it was sold to the new owner.