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Under the Leasehold Reform, Housing and Urban Development Act 1993, a qualifying tenant has the right to acquire a new lease with a term of years equivalent to the unexpired term of the existing lease and an additional 90 years at a peppercorn (i.e. nil) rent. The other terms will remain the same save for any modification to remedy a defect in the lease or update the lease for reasons of, for example, alterations made to the property. The qualifying tenant must pay a premium for the new lease.
Generally, if the term of the lease falls below 80 years, the premium payable by a tenant increases significantly and continues to increase as the term diminishes. A longer term is more attractive to buyers and lenders and a tenant may assign their right to a buyer when selling their property. The premium should be calculated by a specialist valuer. We would be happy to recommend and instruct a valuer on your behalf.
The process is started by the tenant serving a formal notice. This notice has a contractual effect and triggers a strict statutory timetable and liability for the landlord’s costs. Therefore, we advise you seek professional advice before starting the process.
For further information please contact:
Andy Finkel (Harrow) on 020 8422 5678