Marsh said that many leaseholders do not understand the leasehold system and are being taken advantage of, with freeholders charging thousands of pounds more than they should to extend leases.
Marsh said: “I know of one client who was offered a 30-year extension when, under the relevant Act, anyone is entitled to 90 years. Another client was offered an extension for £15,000, against a subsequent independent valuation of £8,000.”
He added that many leaseholders do not know that the freeholder is entitled to demand a cash sum for renewal for any lease that goes below 80 years. Marsh also highlighted that many mortgage lenders are unwilling to lend on properties with leases under 60 or 70 years.
The 80-year rule is likely to become even more relevant, with many properties built during the mid-’90s housing boom with a 99-year lease nearing the the 80-year mark.
Marsh said: “Some landlords are using the complexities of the legislation and the innocence and gullibility of flat owners to their own advantage and I’m anxious that flat owners know what their rights are.”
He added: “The key to realise is that leases are a wasting asset. The shorter the lease when you sell, the worse your position. And if you want to extend in a hurry, you’re in a bad negotiating place.”
