Former Law Society President calls for reform of Lease Extension laws

Paul Marsh, the former president of the Law Society this Summer called for laws dealing with lease extensions to be revised.

In some cases, freeholders are charging too much for lease extensions to those who do not have a thorough knowledge of the law and their rights.

Mr Marsh accused some landlords of taking advantage of flat owners who are not aware of their rights under the legislation or who are forced to attempt to complete the statutory process quickly.

Flat owners and those advising them need to understand that leases are a wasting asset and the shorter the lease when you sell, the worse your position. He went on to say that if flat owners wanted to extend their lease quickly, they would be in a poor negotiating also in a "bad negotiating place".

Leaseholders are beginning to become more aware of their rights to extend their leases, but it is still the case that often they will simply drop the sale price of their property or pay very high prices for "quick" informal agreements with their landlords rather than begin the statutory lease extension process. Flat owners may well obtain a better sale price by starting a claim for a statutory lease extension and then assigning the benefit of that claim to their buyer.

Lessees should also be advised to take advantage of the fact that extending their lease before it goes below 80 years unexpired will cost significantly as a result of no "marriage value" being applied to the price

For queries regarding lease extensions and other landlord and tenant issues please contact Gary Scott.