01708 757575 mbs@ker.co.uk Enterprise House, 18 Eastern Road, Romford, Essex UK, RM1 3PJ

Extending your lease with Havering Council

Extending your Lease with Havering Council

If you have purchased an ex-local authority flat or maisonette either directly from the Havering council under the Right to Buy legislation or you are a subsequent owner, then you may need to think about extending your lease.

Many former Right to Buy leases were granted in the 1980s which means that the original 125 year term of the lease may be coming close to the 80 year mark where potentially you can pay a lot more for the lease extension by the inclusion of an additional compensation figure called ‘marriage value’. This is paid to the London Borough of Havering as part of the lease extension cost and can sometimes be double the cost of a 80 year plus lease extension.

Havering, like many councils, do not offer voluntary lease extensions so you are obliged to use the statutory leasehold procedure which is initiated by something called a Section 42 notice. This is a more complex procedure and involves various steps being taken in a strict and formal timetable.

As you become liable to pay the councils fees for the lease extension process whether or not the section 42 notice is actually drafted correctly and valid it is necessary to get appropriate advice from a solicitor who deals with leasehold extensions. This is where we can help.

Being a Romford firm, we are well acquainted with the requirements for statutory leasehold extensions with Havering and can guide you through the process. We also offer a certain a fixed cost quote when dealing with Havering.

For many people this comes down to numbers. Although Leasehold Reforms are pending, these have been pending for a number of years and a number of the proposed changes such as the abolition of marriage value and the discounting of escalating ground rents in the calculations will have little impact where the term is still over 80 years and the ground rent is minimal and fixed (under the Right to Buy legislation the ground rent is fixed at £10 per annum). To be fair to Havering their legal and valuation  costs are already reasonable and at the lower end of the scale charged by some more commercial freehold landlords (who often use high end London firms who may end up charging more than double than this council).

What will it cost me?

It is often useful to provide real life examples of the potential costs so you have a budget to move forward with.

For a flat worth around £200,000 with an 85 year lease remaining we would expect to agree a premium with the council of around £3000.

The council would be entitled to their legal costs and valuation fees and in past matters they have charged:

  1. Valuation £370.00 plus VAT (£444)
  2. Legal and admin fees £950.00

In relation to our legal fees for managing this whole process we charge £1500 plus VAT (serving the statutory notice, dealing with the counter notice, negotiations, approval of lease extension deed and  registration of the lease extension with HM Land Registry). The additional disbursements are typically £18 official copies of the title, £45 Land Registration fee and £36 bank transfer fees.

The total cost for this example including lease extension premium and all fees would be £6,293.

What about my valuer – do I need one?

You will note there is no valuer cost above. There is no requirement for you to have a valuer to serve a section 42 notice to start this process and given the relatively low premium involved it is a commercial decision for you whether you want to employ a valuer for say £700—800 to try to reduce the premium when the figures are relatively low and the maximum saving would perhaps not justify the cost of the valuation. It may be worth considering this and using on line calculation guides such as https://www.lease-advice.org/calculator/ to give you a starting point for the estimated premium.

You also need to be realistic. The council are not going to accept a “deal” or “cheeky offer” – they will follow the statutory procedure and the figures they will want will not fall far from that process. Again in a real life example a counter offer was served by the council at £3100 and we agreed £2800.

Is there any qualifying criteria to this?

There is one key element to the current legislation. You can only start this procedure if you have owned the flat for more than 2 years. This is why it may impact on sale especially if your lease is in the low 80s because anyone who buys from you would need to wait another two years to start (unless you can agree that the lease extension process is dealt with as part of the sale which we are also able to help with but this is also complex).

Why would I want to extend now if Reforms are coming?

The Reforms look promising for tenants (flat owners) but these Reforms has been pending for some time and there are concerns that they will be delayed further. In the meantime you may want to consider selling or you need to refinance or remortgage (some lenders do not lend on leases of less than 85 years for example) so action may be required now and this is where we can help.

If you can wait then this may be the best course of action provided your lease does not drop below 80 years (and remember to check your lease carefully as not all lease terms are a full 125 years from the date it was first purchased from the council – the start date of the lease may predate this date by many years as the council was permitted to have the same start date for all leases in a building for example so if the first flat was sold many years before then your may have less years on the lease than you think).

As we also said above some of the proposed Reforms may have little impact if the lease is above 80 years because the big thing which will save money is the proposed scrapping of marriage value. You also need to remember this is a promise from a Government which is not known for keeping all promises!

The third point to remember is that lawyers are not going to want to take this on within the last few  months before it drops below 80 years – you should plan to extend at least a year before this period due to the risks involved. The process may take 6-12 months to conclude and you can only serve one valid notice in a 12 month period.



If you want to move forward with a lease extension now we can help. 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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