Leasehold Extension Fees

Leasehold extension requires payment of fees that range from the solicitor's fees to the actual cost of the extension. The cost can be broken down into solicitors fees, lease valuers fees, the cost of doing research and the premium for a lease extension. Visit www.conveyancingcalculator.co.uk to save a small fortune on Conveyancing Fees and Costs with the free conveyancing calculator.

The first person, a leaseholder, must contact is a solicitor. Leaseholder's solicitor plays a crucial role in making leasehold extension a success. Solicitors advise their clients on possible ways of extending leases and also help in researching and documenting lease extension. A contract can be negotiated informally or through a legal framework.

Informal Leasehold Extension

The informal lease extension is when a leaseholder and his landlord agree on terms of extension by themselves without involving the law. The landlord does not get a notice of lease extension. Statutory laws of lease extension such as the 90 year extension period, zero ground rent and others are not necessarily adhered to.

Formal Lease Extension

Formal lease extension follows statutory laws of extending contracts.The leaseholder has to send a notice of lease extension to the landlord. Every negotiation is carried out within the confines of the law. A landlord can not reject duly served notice without proper grounds. Reasons for rejecting lease extension include breach of current contract by the leaseholder. Formal lease extensions are usually more expensive than informal ones because they require the involvement of many parties. A solicitor can help you estimate the cost of either method of conveyance. A leaseholder must pay conveyance fees to both his solicitor and his landlord's solicitor.

Solicitor's involvement

The most common cause of conflict is the freeholder's failure to respond to the notice of lease extension. Each solicitor's fee is usually around ₤1,500.

The major cost of lease extension is the premium. For a lease extension, a leaseholder must pay a premium to the landlord. The premium is calculated based on the location of the house, the current ground rent and the duration of the new lease. A leasehold valuer can give an estimation of the premium. The value of the premium must be included in the notice served to the landlord. The landlord can accept the premium or ask for adjustments. Once a premium is agreed upon, the owner should get either 10% of the premium, or ₤250, whichever is greater. The leasehold can apply for a hearing before a tribunal if the landlord rejects notice for a lease extension. The landlord pays expenses for a lawyer representing him in the tribunal.