As the end of December approaches the length of many flat owners’ leases becomes one year shorter. The inherent value of a flat is linked to the length of its lease, which many fail to appreciate, until they come to sell and find out the hard way that they should have tackled the issue proactively.
When they are in this situation, they often have little room for manoeuvre and are forced to agree terms for a lease extension with a freeholder that are inferior to their legal entitlement, and often costlier.
Alex Greenslade, Honorary Secretary of ALEP (the Association of Leasehold Enfranchisement Practitioners) said: “For most people the years pass faster than they expect and often a lease that one thought was comfortably above the ‘danger zone’ (typically 85 years or less outside central London) is actually in dire need of attention.
“It does not have to be like this. At the very least, if flat owners know exactly how long their lease is, they will not be caught out. Not only should they take action before it becomes a problem, but they should also be aware of the exact date when the lease is going to slip below the crucial 80-year level, after which the freeholder could be entitled to receive thousands of pounds more to extend the lease in the form of ‘marriage value’.
“If you own a flat make one New Year’s resolution – check the length of your lease! It could save you thousands of pounds.”
Flat owners should always seek the advice of a trained expert. Membership of ALEP acts as a badge of assurance so that flat owners and freeholders can be confident that they are employing professionals with the right level of experience in handling potentially complex transactions.