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Extending Your Lease with Barking and Dagenham Council: A Guide

Extending Your Lease with Barking and Dagenham Council: A Guide

If you are the owner of a former local authority flat or maisonette obtained through the Right to Buy legislation from Barking and Dagenham Council, or if you have subsequently acquired such a property, the consideration of extending your lease may be of significant importance.

Many of the Right to Buy leases granted during the 1980s are gradually nearing the 80-year mark of their original 125-year term. As this milestone approaches, the possibility of incurring substantially higher costs for the lease extension arises, primarily due to the inclusion of an additional compensation component known as the ‘marriage value’. This supplementary fee, payable to the freeholder as part of the lease extension process, can sometimes even equate to double the expense of an extension beyond the 80-year threshold.

It is worth noting that Barking and Dagenham, akin to various other local authorities, does not provide voluntary lease extensions. Consequently, the mandatory statutory leasehold procedure must be followed, which is initiated through the submission of a Section 42 notice. This procedure involves a stringent and structured timetable encompassing multiple essential steps.

Given that you become liable for the council’s fees related to the lease extension process, regardless of the correctness or validity of the Section 42 notice, seeking legal advice from a solicitor experienced in leasehold extensions is imperative. This is precisely where our expertise comes into play.

As a Romford-based firm, we possess a understanding of the intricacies associated with statutory leasehold extensions in collaboration with local London Boroughs within our area. We are able to guide you (seamlessly) through the entire process, and our services come with the added assurance of a fixed cost quotation tailored to Barking and Dagenham’s requirements.

While impending Leasehold Reforms remain in the horizon, it’s important to recognize that these reforms have lingered for several years without substantial progress. Moreover, certain proposed alterations, such as the elimination of the marriage value concept and adjustments to calculations involving escalating ground rents, might not be so significant in cases where the remaining lease term exceeds 80 years and the ground rent remains modest and fixed (as stipulated by the Right to Buy legislation, at £10 per annum).

Cost Implications Explained

Providing real-world examples of potential costs can be helpful, affording you a rough guide and framework for informed decision-making.

For instance, in a scenario involving a flat with an estimated value of £200,000 and an 85-year remaining lease term, a premium in the vicinity of £3,000-£4,000 is likely to be negotiated with the council.

On top of this figure the council is entitled to reimbursement for their legal costs and valuation fees, which are usually around £1500 – 2500 plus VAT

Our legal fees for overseeing the entire process encompass a charge of £1,500 plus VAT. This encompasses serving the statutory notice, handling the counter notice, facilitating negotiations, reviewing and approving the lease extension deed, and ultimately registering the lease extension with HM Land Registry. Supplementary disbursements typically encompass £18 for official copies of the title, a £45 Land Registration fee, and £36 for bank transfer fees.

Valuation Advice

It is worth noting that the above breakdown does not include yours valuer cost.  Whilst is is advisable, it is not obligatory to engage a valuer before serving a Section 42 notice to initiate the process. Given the relatively modest premium involved, the decision to hire a valuer at a cost of around £700 to £800 becomes a strategic one. This decision hinges on whether the potential reduction in premium justifies the cost of the valuation, particularly when dealing with relatively lower figures. Online calculation tools like the one provided by https://www.lease-advice.org/calculator/  can offer a starting point for estimating the premium without the need for a professional valuer. Once you are in receipt of the council’s counter offer you can at that stage engage a professional valuer if you feel that the council’s offer/valuation is excessive.

Realism in Negotiations

An important aspect to consider is that the council is unlikely to entertain informal or speculative offers. Instead, they adhere strictly to the statutory procedure, and the figures they seek are bound to align closely with this established process. You can expect to negotiate to some degree but the chance of a low offer being accepted is not realistic because the council will have a duty to get fair value.

Qualification Criteria

One crucial element pertinent to the current legislation is that the initiation of this procedure necessitates ownership of the flat for a minimum of two years. This criterion holds particular relevance, potentially affecting property sales, especially for leases with remaining terms in the low 80s. In such instances, prospective buyers would need to wait an additional two years to begin the process, unless an arrangement is reached to incorporate the lease extension process within the sale transaction—another aspect in which our expertise can offer guidance, despite the inherent complexity.

Timing Considerations

While the anticipated Leasehold Reforms hold promise for tenants, their implementation has been continually delayed, raising uncertainties about timing. In the interim, factors like property sale, refinancing, or remortgaging—where some lenders might withhold financing for leases with less than 85 years remaining—may necessitate prompt action. This underscores the pivotal role we can play in facilitating your decisions and actions.

Itis also crucial to acknowledge that solicitors are unlikely to undertake this process in the final months preceding the lease term dropping below 80 years. To mitigate risks, it is advisable to embark on the extension process at least a year before this critical threshold. The procedure itself could take between 6 to 12 months to conclude, and it’s important to note that only one valid notice can be served within a 12-month period. Planning ahead is essential to avoid undue complications and ensure a seamless extension process.

Next Steps

In conclusion, if you are extending your lease with Barking and Dagenham and require help in serving the notice and dealing with the various steps please contact us.

Please call Mark Sadler on 01708 757575 or email Mark mbs@ker.co.uk for further help and a quotation for your lease extension.



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