Lease Extensions
Lease Extension
For Freeholders
Whether a large estate landlord or single property owner, we offer expert valuation advice and negotiation services through our highly professional team of RICS Registered Valuers with extensive experience in all Leasehold reform matters including providing expert evidence at First Tier Tribunal (Property Chamber).
We offer flexible valuation and negotiations services, including a range of inspected, comprehensive desktop and bespoke reports, giving discounts for repeat work or bulk instructions.
Under the Leasehold Reform Housing & Urban Development Act 1993 leaseholders are required to pay the reasonable valuation fee(s) of the freeholder so we generally recommend inspections as we can assess more accurately the condition and value of the premises, compliance with lease terms, nature and value of tenant’s improvements etc.
Where leases are relatively long and/or market values are modest or homogenous in for example a purpose built block comprehensive desktop reports are generally sufficient.
Our Valuation Report options are:
Lease Extension
Standard Lease Extension Valuation Report
This is our optimal lease extension valuation report and is particularly recommended for properties in Prime Central London locations or where there is a high market value and/or a short lease. This also applies to where there are complex lease structures with intermediate leasehold interest(s).
This is a comprehensive report and valuation for lease extension purposes and is based upon a property inspection in addition to the thorough analysis we undertake as part of a comprehensive desktop valuation.
Report
What is included in the standard lease extension valuation report?
- A full property inspection measuring floor areas to produce a Gross Internal Area (GIA).
- Commentary on the overall condition of the property with more authoritative narrative on the value of allowable tenants’ improvements and any other physical or material factors which may have a bearing on the lease extension premium
- Commentary on the property and any factors relevant to the statutory calculations including the Market Value.
- A step-by-step guide that includes advice as to your statutory and non-statutory options and specific client recommendations.
- A statutory lease extension valuation with a recommended premium figure to be included in the Section 42 Notice or Section 45 Counter Notice, as appropriate.
- A range of premiums being an estimate of the likely lower and upper limits.
- An evaluation of non-statutory terms, where appropriate.
- An analysis of the lease, freehold and leasehold Titles and an assessment of the Market Value of the property utilising a range of industry databases to identify local comparable sales transactions and, where necessary, by reference to competent local estate agents
- Client specific recommendations on how to undertake your negotiations, for example on a statutory or non-statutory basis depending on your circumstances and other relevant factors.
This service is fast with a report typically being available about 7 days from instruction, subject to receipt of all the relevant information, copy leases etc and being able to carry out the inspection. Usually reports are available within 48 hours of inspection. We are an environmentally friendly company, therefore the reports are presented in an electronic PDF copy format, however paper copies of the report can be posted if necessary. We are able to include solicitor recommendations as required and, where necessary, our terms of engagement will include our fees for negotiation services.
Report
Comprehensive Desktop Valuation and Report
Our Comprehensive Desktop Reports provide most of the information that a Standard Valuation Report does, but without the additional cost of a property visit.
Included in the report are:
• Your step by step guide, including details of your statutory and non-statutory options and specific client recommendations.
• A statutory lease extension valuation with a premium figure for you to include in the Section 42 Notice or Section 45 Counter Notice, as appropriate.
• A range of premiums being an estimate of the likely lower and upper limits.
• An evaluation of non-statutory terms, where appropriate.
• Our analysis of your lease, freehold and leasehold title and an assessment of the current market value of your flat, based on comparable evidence and transactions in the locality. We use a range of property databases and, where necessary, we refer to competent and professional local estate agents. We base our long lease values on the assumption that the property is in a “lease maintained” condition and make no specific allowance for tenants improvements in the absence of any clear information and photographic evidence.
• Client specific recommendations on how to progress your negotiations, for example on a statutory basis, depending on your own circumstances and a number of other factors.
We offer a fast service, with a report turnaround typically within five days from receipt of our Terms of Engagement; exceptionally, we are able to issue reports within 48 hours of confirmation of instruction.
Our reports are sent in an electronic pdf format. We are also able to recommend a range of solicitors appropriate to the particular case and circumstance.
For higher value properties, those in Prime Central London locations or with a short lease we recommend a Standard Valuation Report, including a property inspection.
If you’re a freeholder we recommend a Standard Valuation Report, not least because your leaseholders are required by law to pay your (reasonable) costs for a valuation, which includes a full property inspection. This is generally appropriate to obtain an accurate view of the condition of the flat, whether any unconsented alterations have taken place or there are other breaches of the lease by the tenant.
Recommendations
We recommend a property inspection:
- When acting for landlords responding to a Notice of Claim where the leaseholders are generally paying the valuation fees.
- Where higher value properties are involved and /or flats are on short leases. This is essential for Prime Central London properties, especially when any representation at a First Tier Tribunal (FTT) is likely to be initiated.
- Where there is a lack of comparable sales evidence and/or the property, strata of Title etc is complex or unusual.
Please note that properties subject to a Head or Intermediate leasehold interest(s) will require further investigation, which may have bearing on the valuation fee. We would be delighted to discuss these with you on an individual case-by-case basis to ensure you are receiving the most appropriate advice.
We are able to advise or conduct negotiations for lease extensions whether on a statutory or informal basis.
Contact us if you’re considering offering terms to a leaseholder or have been served with a Section 42 Notice.