So, you have decided you want to extend the lease on your flat. One option is a voluntary lease extension.
In a previous blog, Sophie Masters, a Paralegal from our property team, explained why the length of time left on a leasehold flat matters. In this blog, she looks at one of the two ways to extend a lease: the voluntary, or informal, lease extension.
What Is a Voluntary Lease Extension?
A Voluntary lease extension is an informal agreement between you the leaseholder, and the freeholder, to extend the term of the lease.
It is a voluntary, arm’s-length agreement, so it is often the case that the terms agreed will be inferior to what can be achieved in a statutory agreement but nevertheless may meet the leaseholder’s requirements.
How the Voluntary Lease Extension Process Works
Step One: Approaching the Freeholder
You will need to communicate with your freeholder to see if they would be willing to grant a lease extension privately by agreement. This does not involve the courts or tribunals. (The Landlord does not have to agree to this extension, and if they refuse the extension, you cannot continue down the voluntary lease extension route.)
Step Two: Preparation for Negotiation
- 1. Obtain a valuation from a surveyor. It is recommended that an experienced surveyor is instructed to value your property and to provide an estimate of a fair premium. The valuation is important to avoid overpaying on the premium. You can choose your own surveyor or get one of our solicitors to recommend one.
- 2. It might be a good idea to prepare a checklist of things you want to achieve in the negotiation: what minimum terms you want in the new lease, the length of the new lease, premium to pay, etc.
- 3. Remember, however, that negotiation goes both ways, and you must be prepared to give and take to achieve an acceptable agreement both parties are happy with.
Step Three: Negotiating Heads of Terms
This stage involves negotiating the heads of terms with the landlord or their solicitor. The aim of the negotiation is to agree on the principal terms of the lease extension. Such as:
- The premium payable for the lease extension
- The length of the new lease term
- The responsibility for each party’s legal and valuation costs
- Any amendments to the existing lease terms
Remembering again that the process is one of give and take, because if the terms cannot be agreed, the freeholder is under no obligation to agree to the terms of the proposed Informal Lease. Equally, if the landlord’s offer is a poor one, and the terms do not meet your minimum requirements, you must be prepared to walk away and seek a Statutory Lease Extension instead.
Step Four: The Final Steps
- If agreement is reached, the landlords’ solicitor will usually prepare the lease extension documents for review by you and your solicitor.
- These documents will then be executed by both parties
- Completion of the Lease Extension
- Registration on the Land Registry
A voluntary lease extension can be quicker and more flexible than the statutory route, but the terms are only ever as good as what you manage to negotiate. Getting the valuation right, and the heads of terms with it, is where clear advice makes the difference between a fair deal and an expensive one.
Lease Extension and Conveyancing Specialists
Our property solicitors guide leaseholders through lease extensions, collective enfranchisement, and the right to manage. We provide clear, practical legal advice to help you protect your property, gain control over management, and secure long-term value for your home.
CQS Accredited Law Firm
Berlad Graham is accredited by The Law Society’s Conveyancing Quality Scheme (CQS), a recognised quality standard for SRA-regulated firms in residential conveyancing. It sets out the standards of competence, risk management and client service levels expected of practices.
If you are looking for a reliable and responsive conveyancing solicitor, get in touch with Berlad Graham today. You can call us on 0330 175 5655 or email: info@bglaw.co.uk. To find out more about our residential property practice, click here.
