What happens if we can’t reach an agreement?
If no agreement is reached, then either you or the freeholder is entitled to apply to the First Tier Tribunal (Property Chamber) to make a decision. It normally takes 4 to 6 months for a Tribunal hearing to be scheduled. Each party is represented and expert evidence can be produced.
If negotiations do break down and you are going to apply to the Tribunal, one of the most important points you should note is the time scale. Application to the Tribunal must be made no later than 6 months from the date of the Counter Notice.
These are some of the most often asked questions and I am sure that you have many more. We are very happy to have a no obligation chat with your clients about the whys and wherefores of lease extension and enfranchisement. Or, indeed, with you if you would like to know more.
What happens after my solicitor has served the Section 42 Notice?
Once the Section 42 Notice has been served, the freeholder has 2 months in which to respond by serving upon you a Counter Notice. The Counter Notice will either accept or reject your claim. It will also state whether or not the freeholder is willing to accept your offer for the lease premium. If not, then it will state the lease premium the freeholder requires. There is then a further period of 2 months during your surveyor can negotiate on your behalf with the freeholder’s surveyor.
What is this “Marriage Value”?
In really simple terms : Once the lease is extended, the total value of the property with the new extended lease exceeds the total value of the property with the existing lease. This difference is called marriage value and is split 50:50 once the lease length hits 80 years.
What will I have to pay in addition to the Premium?
The eventual cost of the new lease will be the premium plus both your own and the landlord's "reasonable" legal and valuation costs, except any costs which are incurred in connection with proceedings before a Property Tribunal (LVT).
Why is the 80 year mark so important?
The premium increases significantly once the term drops below that 80 year mark due to the allowance of Marriage Value. If the Lease goes just one day below 80 years there can be a difference of thousands of pounds in the Premium due to the addition of Marriage Value.