Negotiation for Lease Extension Essay

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The basics of lease extension negotiation

Those who have held the title of freeholder for a will be understanding of the riggers that comes with extending a lease. However, the processes involved can be daunting to those new to the field and its complex nature can also be somewhat overwhelming. The laws and procedures surrounding lease extension have never been more complicated than they are right now, meaning that negotiating a new deal with your leaseholder can be tougher than you expect. The following guide looks at the basics you need to know when negotiating a lease extension.

Is the freeholder eligible?

The core question and the base of any perspective negotiation is whether or not the freeholder qualifies for an extension.
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You should also ask for a deposit (usually 10% of the lease cost) for security reasons, which should be paid to you by the leaseholder within two weeks of their request of extension.

How to negotiate a better price?

The negotiation period is the most crucial part of the lease extension process and you are within your right to turn down or counter offer any price proposed to you. You have up to two months after receiving offer to send back a counter offer in order to try and get a price that is better suited to you. After a counter offer has been sent it will signal the opening of the negotiations between a freeholder’s party (yourself and your solicitor) and a leaseholders party (he or she and their solicitor). If both parties cannot come to a conclusion then a Valuation Tribunal will be needed. The tribunal will consider all offers sent and will decide upon what they consider to be a fair price. Other issues related to the lease can be raised during the tribunal however this will delay the outcome.

Should you seek professional advice?

After a receiving a leaseholders request for extension a freeholder will need to evaluate their own legal situation. This usually entails speaking with a number of legal firms to see which of them is best served for your current situation. Procedures and processes surrounding lease extensions can be complex, so it is important
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