Extending the lease on your property is an important step that can protect your investment and enhance its market value. However, the process can be fraught with complications if not handled correctly. At Taylor Surveyors, we’ve helped countless leaseholders through this journey, and we’ve seen first-hand where things can go wrong. In this blog, we highlight some of the most common pitfalls in the lease extension process and more importantly, how to avoid them.
Delaying the Process
One of the most common and costly mistakes is simply waiting too long. As a lease term drops below 80 years, the cost of extension increases significantly due to the introduction of ‘marriage value’ an added amount payable to the freeholder. Acting early can save you thousands. We recommend starting the process when your lease approaches the 85-year mark to avoid unnecessary expense and complications.
Not Instructing a Specialist Surveyor
Lease extensions require a specific valuation methodology that differs from standard property valuations. Relying on a general property surveyor can lead to overpaying or underestimating the premium, which could delay the process. At Taylor Surveyors, our RICS-registered valuers specialise in leaseholds and are experts in producing robust, evidence-based valuations.
Neglecting Legal Advice
The lease extension process is legal as much as it is financial. Failing to instruct a solicitor with experience in leasehold law can lead to incorrect notices, missed deadlines, or even a voided claim. A qualified solicitor ensures that your statutory rights are properly exercised, and all documentation is handled correctly from the outset.
Misunderstanding Your Rights
Many leaseholders don’t realise they have a legal right to extend their lease under the Leasehold Reform, Housing and Urban Development Act 1993, provided they’ve owned the property for at least two years. This entitles them to an additional 90 years on top of the existing term and a reduction of ground rent to zero. Understanding this right can protect you from accepting unfavourable informal offers from freeholders.
Accepting Informal Offers Without Scrutiny
Freeholders may offer lease extensions outside of the formal statutory route. While these can appear more straightforward, they often come with less favourable terms—such as continued ground rent or limited lease extensions. Always seek professional advice before agreeing to an informal offer to ensure it aligns with your long-term interests.
Failing to Budget for Additional Costs
Many leaseholders focus on the premium but overlook the associated costs—valuation fees, legal fees, the freeholder’s reasonable costs, and potentially tribunal fees if negotiations break down. Being prepared for these expenses from the outset can help avoid delays and surprises.
Get Expert Support
Navigating a lease extension doesn’t need to be stressful. With the right team behind you, you can protect your asset and secure better terms with confidence. At Taylor Surveyors, we provide expert valuation services and work alongside trusted solicitors to guide you through the process from start to finish.
Contact us today to discuss your lease extension options and ensure you avoid the common pitfalls many leaseholders face.