One of the first pieces of advice we give clients who ask us about extending a lease or the process of buying or selling a freehold is to go the Leasehold Advisory Service website (www.lease-advice.org). It provides free advice on the law affecting residential leasehold property in England and Wales, including the reasons why a flat owner might want to extend a lease and the processes involved in both extending a lease or buying/selling a freehold. Written by a Non Departmental Public Body (NDPB) funded by Government, not only is the website an objective source, it also covers the vast array of issues more succinctly than most.
You will note that throughout the Leasehold Advisory Service website, you are advised to seek professional advice from both a valuer and a solicitor. The most important point thereafter is to ensure you employ professionals who have the appropriate level of expertise in valuing lease extension premiums and purchase prices for freehold interests.
Premium / Purchase Price Valuations
We are a firm of valuers, experienced in valuing premiums for lease extensions or valuing purchase prices for buying and selling freeholds. A lot of people mistake the valuation required as simply being a Market/Mortgage Valuation, however, these valuations are investment valuations of the respective interests of each party and as such are far more complex. Whilst consideration to Market Value is given, the valuations are based on a number of factors as the methodologies take into account the change in the respective interests in accordance with the terms in the existing lease and the new lease (if applicable), as ultimately the freeholder is to be appropriately compensated for granting the longer lease or selling the freehold.
As you will have seen from the Lease Advisory Service website, qualifying criteria aside, there are several factors to consider when seeking a lease extension or buying/selling a freehold. For instance, flat owners need to consider the most appropriate route to go about the process (“Formal” or “Informal” route), noting the factors that can limit their negotiating positions, whereas freeholders need to ensure they respond as necessary to any leaseholder claim.
The specific details of each case must be considered in order to advise appropriately to bring about the most cost effective and timely result, and we work with you and your solicitor from the outset to ensure this happens.
Once the facts are known and the appropriate route forward has been established we carry out our valuations to:
- Provide the "best and worst" case valuations, in order to best advise on the possible outcome of the negotiations.
- Advise on the premium to offer in the Initial Notice or Counter Notice if proceeding under the Formal route.
- Negotiate with the other side’s valuer to agree the premium/price to be paid, including representation at Tribunal, if necessary. Please note, Tribunal does not apply to the Informal route.
We also carry out valuations and advise freeholders and leaseholders concerning “Right of First Refusal” offers, which follow a different set of procedures.