The dangers of an informal lease extension скачать в хорошем качестве

The dangers of an informal lease extension

For more information about extending your lease, call our expert solicitors on FREEPHONE 0800 1404544, have a look at our main website at http://www.bishopslaw.co.uk, or visit our specialist lease extension website at http://www.leaseextensionuk.co.uk. In this video Lease Extension solicitor Samantha Davies explains the risks involved in agreeing an informal or voluntary lease extension with your freeholder. Transcript: "What is an informal lease extension?" Put simply, an informal lease extension is one that is privately agreed with your freeholder outside of the statutory provisions. What is the difference between a formal and an informal lease extension?" A brief summary of the description between two lease extensions that you may get are as follows. Under a statutory lease extension then you will get an additional 90 years on top of you unexpired term and your ground rent will go down to a peppercorn, which is nothing, for the remainder of the lease term. The legislation also provides that if your lease is potentially defective or requires modification to bring It in line with modern standards, so for example with the insure provisions then this can be modified in the lease extension and be dealt with in one which is sensible. Under a private regime there are no such restraints, a freeholder can ask for anything they want to and so they may seek to include terms which may be onerous to you or may put you in a more disadvantaged position than you're currently in. "Isn't an informal lease extension simpler and cheaper?" It may initially appear simpler and cheaper to obtain an informal lease extension by agreement with your freeholder however there are some significant risks and pit falls of doing this. The freeholder may withdraw at any time and it is a potentially risky strategy if your lease is running down to the 80 year mark. "What happens if my landlord withdraws from an informal lease extension?" Your landlord or your freeholder can withdraw from the process of an informal lease extension at any time, there is nothing to bind them to continue with the process and it is only once the document is completed and so signed by yourself and your freeholder that that lease extension actually takes place, at any time before this your freeholder can walk away, and you have no comeback against them for doing so. "My Lease is approaching the 80 year mark -- Is an informal lease extension risky?" There are some risks in pursuing an informal lease extension if your lease is approaching the 80 year unexpired mark. Once a lease drops below 80 years then the premium payable to your free holder is likely to rise sharply and continue to rise the shorter the lease becomes. At the time your lease is over 80 years unexpired you do not have the additional element to pay by way of marriage value to your freeholder. Some unscrupulous free holders will agree to an informal lease extension if your lease is approaching the 80 year mark. They may drag their heels and be very slow in responding to you so that your lease then drops down below the 80 year mark, at which point they may withdraw their consent to an informal lease extension. Once this occurs you will then be left with a lease below 80 years and so will have to pay that additional premium or payment to the free holder. "Why is an informal lease extension risky?" A potential pitfall under the informal or private lease extension route is that you cannot fix the valuation date and so if the free holder decides to take 6 months of negotiations and walk away you are then left with calculating the lease extension at today date, rather than when you started negotiations. By contrast serving a notice under the statutory regime fixes the valuation date and insures your right to a lease extension regardless of how long your freeholder drags out negotiations. "Is there a time limit?" When negotiating a formal or private lease extension there are no real limits on the terms that can be agreed between the parties as long as the terms are obviously legal and acceptable by both parties then the terms will feature in the new lease. "Isn't an informal lease extension cheaper?" At the outset it may appear that informal lease extension is the cheaper, and for some lease holders it often does work out to be so. With an informal lease extension you will have your own legal costs but you will also be responsible for the freeholders legal and valuation costs, as well as the final premium that you end up paying. The danger is that if the freeholder walks away at any time during the transaction you are obliged to pay his costs from the outset and so you will not only have to pay you own legal cost, but the freeholders, and if you have no lease extension at the end of that you will still need to follow that statutory regime in order to obtain a lease extension, effectively wasted and duplicated costs. For more info and to get in touch, visit http://www.bishopslaw.co.uk