When it comes to a Shared Ownership house lease, the cost of extending the lease can mean that the better option may be to buy further shares in the property or staircase out if possible (buy all the remaining shares). If you decide that extending the lease is the best option for you, you will still have to pay for the share you haven’t purchased.
If you live in an apartment, the issue of the lease getting shorter will still remain following the staircasing process (buying all of the remaining shares). If you wish to remortgage your property or sell and there are less than 75 years left on your lease, you may find it very difficult.
A right to a lease extension is a statutory right for 100% owned flats as long as you meet the qualifying criteria. As this is prescribed by law, to follow this route you will need to serve a statutory notice under section 42 of the Leasehold Reform Act 1993. This should be sent to your Leasehold Services Officer who will record this and forward you our solicitor’s details so that the formal process can begin.
Shared owners do not have a statutory right to have a lease extension granted. However, in most circumstances we can allow a lease extension through an informal process.
For us to work out the premium (valuation) payable for the lease extension we will need to undertake a RICS valuation of your property, this will be carried out by a company called Lawrence Wightman. The valuation cost will be in the region of £550 to £750, a fixed cost would be agreed once you confirm that you wish to go ahead with the lease extension. However, before we commence the process, we need written confirmation from you that you will pay the following costs:
- The cost of the valuation, plus VAT
- Administration fee (approximately £100 plus VAT)
- Midland Heart’s solicitor’s fees (approximately £700 plus VAT)
- Your own solicitor’s fees (approximately £700 plus VAT)
- The premium set by the surveyor for the extension. Unfortunately we can’t give an estimate of the premium payable without the valuation, and the surveyor will then be responsible for calculating the premium.
Please note, these costs will increase if Midland Heart is not the freeholder of the property.