All posts by davisbrown

Should I assign or sub-let my commercial lease?

Lease agreement document with keys and pen

If you are planning to vacate your commercial premises it could be costly to negotiate a surrender of the lease with the Landlord, especially if there are several years remaining on the lease. To avoid this expense, an option could be to find a third party to occupy the premises covering the costs you would otherwise be paying. This can be done either by sub-letting or assigning your lease.

It is first important to read your lease and understand what the Tenant’s ‘alienation’ rights are as this could restrict your options. It is then essential to understand the key differences between the two, in order to decide on the best option, depending on specific circumstances.

In simple terms an assignment of a lease is the transfer of a lease to a third-party who will become the new tenant or ‘Assignee’. They will pay rent directly to the Landlord and take over all the responsibilities as stated in the original lease.

In a sub-lease the original Tenant continues to pay rent to the Landlord as usual, but the ‘sub-lessee’ would pay the original occupier a rent in return for occupying the premises.

So, what are the costs and benefits of each?

When sub-letting a premises there is an opportunity to negotiate with the ‘sub-lessee’ and potentially achieve a higher rent or ‘profit’ rent. Terms within the sub-lease, such as a break-option could be included, which would allow the ‘sub-lessor’ to re-occupy the space. Depending on wording within the original lease there may be the option of sub-letting part of the demise. This appeals to many tenants if they are occupying more space than is required and want to reduce costs yet are planning to reoccupy the space when they expand in the future.

When sub-letting, the relationship between Landlord and the original Tenant does not change. The Tenant will remain liable for any costs, such as dilapidations at the end of the lease, no matter what the sub-tenant does. It is therefore important to have a carefully drafted sub-lease to avoid any problems or unexpected costs caused by the sub-tenant in the future.

In an assignment, the lease is transferred to the ‘Assignee’, and they will pay the Landlord directly. The ‘Assignor’ will longer be responsible for any costs or responsibilities within the lease and can walk away from the premises. There may also be an opportunity to seek a premium if the passing rent is significantly below the Market Rent.

The Landlord may request the ‘Assignor’ acts as a guarantor before they will grant consent for the assignment of the lease. This will mean that if the ‘Assignee’ stops paying the rent or goes into administration the Landlord can come back to the original Tenant to recover cost.  To reduce this risk, one should look for a company with a strong financial covenant when assigning a lease.

If you are considering assigning or sub-letting your space, there will be several factors you will need to consider that could include:

Is there an opportunity to get a ’profit’ rent or a premium?

What is permitted within the lease?

What are the costs of managing a sub-tenant?

What is the risk of the sub-tenant / assignee being unable to pay the rent?

And finally, to avoid any unforeseen costs or problems it is always worth seeking professional advice in advance!

20 Buildings to open over the last 20 Years – London

Us Londoners are so incredibly lucky with the architecture we are blessed with – our skyline is forever changing and there is always something new to admire/detest!  As it’s our 20th birthday this year, we’d love to share some of the capital’s buildings that have either been built or refurbished or added to in the last 20 years.

T H E  S H A R D

Opened in February 2013.

shard

T H E  W A L K I E T A L K I E  aka  2 0 F E N C H U R C H  S T

Opened in May 2014.

walkie

Q U E E N S  originally an Art Deco cinema – now an apartment block

Opened November 2014.

queens

B A T T E R S E A  P O W E R  S T A T I O N  – now residential and commercial units

Opened 2017.

Batpwerpic

3 0  S T  M A R Y  A X E  aka  T H E  G H E R K I N

Opened April 2004.

gherkin

S T  P A N C R A S  S T A T I O N

The renewal opened November 2007.

stpancras

L E A D E N H A L L  B U I L D I N G  aka T H E  C H E E S E  G R A T E R

Opened July 2014.

cheesegrater

T H E  M I L L E N N I U M  D O M E

Opened 31st December 1999!

Millennium_Dome_1

T A T E  M O D E R N (EXTENSION)

Opened June 2016.

tmext2

O L Y M P I C  S T A D I U M

Opened May 2012.

olympicstadium

F I T Z R O Y  P L A C E  aka  P E A R S O N  S Q U A R E  (developed from the former Middlesex Hospital site)

Opened 2015.

pearsonsquare

C I T Y  H A L L

Opened July 2002.

Using in-camera HDR in low light.

W E M B L E Y  S T A D I U M

The new 90,000 stadium opened 2007.

WEM

E M I R A T E S  S T A D I U M – home of Arsenal football club

Opened 2006.

ermiratesarsenal

C E N T R E  P O I N T – now a residential block

Opened 2018.

Centre Point 1

B B C  B U I L D I N G – new refurbishment

Opened June 2013.

bbc

P L I M S O L L  B U I L D I N G

Opened 2017.

buildington

photo ref: buildington.co.uk

L O N D O N  E D I T I O N  H O T E L  (formerly the Berners Hotel.)

Opened 2013.

berners

T H E  B R I T I S H  L I B R A R Y

Opened in 1998.

British_library_london

M I L L E N N I U M  B R I D G E aka W O B B L Y  B R I D G E

Opened June 2000.

London_millennium_wobbly_bridge

Candy for the eyes! 20 London Square Gardens.

Garden Squares were created by the Georgians and Victorians to bring the feeling of the countryside in to the city.  They were, and still are a place to socialise with your friends and neighbours.  As Estate & Letting Agents in the West End we are often whizzing around the back streets admiring the beautiful gardens around us, some are so tranquil it’s difficult to believe you are actually in the Big Smoke!  Here are 20 of our faves …

rosmead garden 2

Rosemead Gardens, W11  

This square has very romantic connotations – it was where Hugh Grant & Julia Roberts trespassed in the film Notting Hill.

fsq

Fassett Square, Hackney

Does this square ring any bells with soap fans?  It should do as it inspired the EastEnders set!

Fitzroy_Square_London3

Fitzroy Square, Fitzrovia

Paddington_Street_Gardens4

Paddington Street Gardens, Marylebone

This was created during the 18th century as an additional burial ground for the old St Marylebone Parish Church.

Brunswicksquare5

Brunswick Square, Bloomsbury

This is 3 acres of public gardens in London’s West End. Complete with red telephone box!

manchestersq6

Manchester Square, Marylebone

This is the square facing towards Manchester House, which houses the world renowned Wallace Collection.

BRY

Bryanston Square, Marylebone

Named after its founder Henry William Portman’s home village of Bryanston in Dorset, it was built as part of the Portman Estate between 1810 and 1815.

lennox

Lennox Gardens, Chelsea

Lennox Gardens was created in the late 19th century, formerly being a cricket ground.

QUEEN CHARLOTTE

Queen Square, Bloomsbury

There has been confusion about this statue in Queen Square, it was first thought to be Queen Anne, but more recently is believed to be depicting Queen Charlotte.  Will we ever know for sure?!

bonnington-square-gardens

Bonnington Square Gardens, Vauxhall

This “secret” square is a beautiful place to relax and have fun.  It’s quite bohemian with vegan cafes and parties held throughout the Summer months.

ken

Cleaver Square Gardens, Kennington

This Georgian Square in south London has long been used as a bowling green and looks stunning in the spring when all the cherry blossom is in bloom.  There’s a gorgeous little pub on the corner too!

Belgrave-Square-007-1024x679

Belgrave Square Gardens, Knightsbridge

A beautiful place to relax in central London.

bedford

Bedford Square Gardens, Bloomsbury

It is one of London’s most beautiful and best-preserved historic squares. It was built between 1776 and 1780 as a scenic residential area for the city’s upper middle class.

russell

The fountain at Russell Square Gardens, Bloomsbury.

rath

Rathbone Square Gardens, Fitzrovia

This new development includes offices, retail,  restaurants and premium residential all centred around a new garden square.

clevelandsquare

 Cleveland Square Gardens, Paddington

Cleveland Square was created in 1855 when the formerly rural area was being developed as part of the Paddington Estate.

Montagu_House,_Portman_Square

Portman Square, Marylebone

This picture dates back to 1878 with Montagu House facing the Square.

Chalcot_Square_-_geograph.org.uk_-_1005457

 Chalcot Square, Primrose Hill

Ted Hughes & Sylvia Plath lived here in the 60s; it’s unmistakeable coloured houses surrounding it.

downingst

Downing Street Gardens, W1

A private garden, but one weekend each year there are many private garden squares that are open to the public – don’t miss out!

RosaryGardens-main

Rosary Gardens, SW7

In the 1820s the land on which this development now stands was a 3 acre field called Rosehall, hence the current name.  A very sought after area in Kensington.

 

20 CLEVER WAYS TO MAXIMISE STORAGE SPACE

Our city is filled with characterful and beautiful buildings but living in London means you sometimes have to compromise on space. As Estate Agents in London, more often than not we hear our clients saying ‘there’s not enough storage space’.  It really is key when selling or letting and it is important to the buyer.

Here are our 20 favourite storage ideas…

FIRE PLACE ALCOVE

Fireplace

The fireplace is often the focal point in a room – adding storage around it will create a space for all sorts – books, pictures, whatever you fancy.

UNDER STAIRS STORAGE

Under stairs storage

A great place for cupboards, book case display or a work space.

HIGH CEILINGS = MEZZANINE FLOOR

Minimalist open space, white kitchen with mezzanine and modern spiral staircase, loft with bedroom, concept interior design background, architect designer idea

London has row upon row of beautiful converted houses. The ground floor and first floor often have ceiling heights of 3.5 metres so how about adding a cool mezzanine floor?

If your not a fan of the mezzanine, consider building full height cupboards to maximise the space.

BEDS WITH STORAGE

bed storage

This is a genius idea – particularly for small bedrooms where you can’t get a lot more in than just a bed.

WINDOW SEATS

We love a window seat, great for sitting on and admiring the view and would make a good seating area for guests.

Shabby chest of drawer with pillows

SLIDING POCKET DOORS

pocket

Fantastic space saving in small rooms or where you want the sleek, minimalist look.

MAKE A FEATURE WALL WITH BOOKCASES AND SHELVES

black-bookcase-1

MAKE USE OF EMPTY WALLS

3d rendering interior and exterior design by myself

 

If you have an empty wall, use it. Build wardrobes, shelves and cupboards.

MAKE USE OF EAVES IN THE LOFT

lOFT STORAGE

Out of sight, out of mind!

STAIRS WITH DRAWS

Stairs with hidden shelves

Probably one of the most novel (& practical) storage ideas ever.

PUT A SHELF ON IT!

Whatever can hold a shelf do it – get creative!

Shelf

DAYBED

Sofa in the day. A bed a night. Space saving.

Day bed

BUILD CUPBOARDS AND SHELVES AROUND AND ABOVE DOORS

Shelving around door

KITCHEN ISLAND OVERHEAD SHELVES 

Island storage

A convenient place to keep all that kitchen paraphernalia plus an attractive addition to the kitchen.

INSTALL WC UNDER THE STAIRS 

A great use of otherwise wasted space.

wc

STORAGE SOFAS & CHAIRS

Folding sofa bed couch with storage space, isolated on white background, saved path selection.

Pretty much everything you sit on can double up as an ottoman.

HEADBOARDS

Headboard

Yup – the humble headboard can now double up as storage space – who knew?!  Ikea does a good line.

BATHROOM ALCOVES AND SHELVES

They make pretty features and are perfect for displaying/storing toiletries.

Bathroom alvoce

SPIRAL WINE CELLAR

Spiral wine cellar

Well, why not?!

STORAGE ON WHEELS 

A movable kitchen island or a movable table can then be wheeled from room to room if desired.

kitchen island on wheels

 

 

20 Alternative Construction Materials, Techniques and Technologies

  1. R A M M E D  E A R T H

This age-old technique has existed since at least the Neolithic period and involves compressing damp earth to construct foundations, floors and walls.

 

  1. C O B

Similar to rammed earth but with straw included to act as a binder.

 

  1. ADOBE

Similar to rammed earth but where individual bricks are formed from the local soil.

 

  1. S T R A W-B A L E  C O N S T R U C T I O N

Although this method of constructing walls is ancient, it has seen a recent revival among passive environmentally friendly designs.

"using straw as a construction material is a new and ecologic way of vconstruction. In Germany it is getting more and more into fashion to build a house out ot straw. The picture shows the frame work, the compartments are filled with pressed straw. Inside  a 5 cm layer of clay plaster will be applied, the outside will be covered with wood panels. This way of construction is not only ecological, but creates a very comfortable living environment."
“using straw as a construction material is a new and ecologic way of vconstruction. In Germany it is getting more and more into fashion to build a house out ot straw. The picture shows the frame work, the compartments are filled with pressed straw. Inside a 5 cm layer of clay plaster will be applied, the outside will be covered with wood panels. This way of construction is not only ecological, but creates a very comfortable living environment.”
  1. B I O  C O N C R E T E 

A recent development by a microbiologist, this is like regular concrete but mixed with a type of bacteria which is capable of self-repairing cracks when activated by water.

 

  1. A S H C R E T E 

This is an alternative to concrete which involves using fly ash instead of cement.

 

  1. P A P E R C R E T E 

This material is created by combining re-pulped paper fibre with Portland cement and soil.

 

  1. B A M B O O 

This versatile and durable material can be used for almost every element of a building and is considered one of the most eco-friendly materials on the planet.

 

  1. E A R T H S H I P  H O M ES 

These are typically off-the-grid homes which are constructed entirely with recycled and/or natural materials.

One of the famous Taos Earthship homes under construction.  Showing the building materials of earth, soda cans, and column forms of the structure.
One of the famous Taos Earthship homes under construction. Showing the building materials of earth, soda cans, and column forms of the structure.
  1. S H I P P I N G  C O N T A I N E R  H O M E S 

Utilising a used shipping container to form the shell of your home has become more popular in recent years.

 

  1. 3-D  P R I N T I N G 

Recent innovations in technology have meant that printing houses is now a possibility.

Three dimensional printing machine
Three dimensional printing machine
  1. M Y C E L I U M 

Although yet not a tried and tested construction technique, this rootlike part of fungus has recently been used to manufacture furniture and could start being used as an organic building material.

 

  1. F E R R O C K 

This is a material which involves making use of steel dust, which is a by-product produced by the steel industry, to create a concrete-like building material.

 

  1. C R U M B  R U B B E R 

Recycled rubber produced from particles of used tires. Typically used for surfacing and roofing purposes.

 

  1.  D E S E R T  S A N D  C O N C R E T E 

As typical types of sand used in construction is dwindling, this type of concrete could become very popular if successful in development.

 

  1. I C E 

Only works in certain climates. Every year in Jukkasjarvi, a village in Sweden, they build an entire hotel of out ice which melts as the season changes.

Icehotel in Jukkaj?rvi, Kiruna, north of Sweden
Icehotel in Jukkaj?rvi, Kiruna, north of Sweden
  1. B O T T L E S 

Glass bottles have been known to have been used in wall construction, usually in conjunction with cob/rammed earth. There is a temple in Thailand made from more than 1 million beer bottles.

 

  1. S A L T 

Not the most widely used material in construction. The hotel Palacio de Sal Resort is a hotel constructed from salt on a Bolivian salt plain.

 

  1. P L A S P H AL T 

Typically used for road construction, this product is made up of grains of plastic waste which replaces sand and gravel in asphalt production.

 

  1. N E W S P A P E R  W O O D 

This is created simply by rolling up old newspapers and combining with glue. This can be used in many cases as an alternative to wood

20 Top Tips on Planning Permission

  1. Do you need Planning Permission? 

Under Permitted Development Rights you can extend up to set parameters and may not need planning permission at all.

Part of architectural project with pen

  1. Listed Building Consent 

If your property is listed you will need Listed Building Consent as well as Planning Consent.

  1. Understanding what precedent means

People incorrectly assume that if someone else has done it, they will be able to get the same   feature on their house with no problems.

These houses may have had these features for a long period of time and these could have been approved through a certificate of lawfulness. Also planning policy changes and the feature you want may now not be in favour with the local authority.

  1. Use the pre-app system

The pre-app system is there to help you put in an application which will get approved. It will generally only cost a few hundred pounds and the likelihood of the application going through it greatly increased and should save you a great deal of time with refusals, although this is not guaranteed.

Kitchen doors with various of kitchen cabinet wood color samples, various of kitchen counter top samples and various of painting colors samples overwhite kitchen design drawing.

  1. Talk to your neighbours

Always talk to your neighbours before putting in your application. If you are going to disagree its better that its at this early stage so you can try and come to an agreement. Rather than them putting in an objection once the application is in and it being refused for something that could have been avoided. You will usually need cooperation from your neighbours in the course of a build so it’s not worth starting off on the wrong foot.

Ultimately a neighbour’s objection will not stop your application going through if it’s in line with policy but when it comes to further down the line and you need a scaffolding licence from them a chat before it all starts can do wonders.

  1. Get Design Advice

Appoint an architect early to go through potential designs and what is feasible.

  1. Appointing a Builder 

Get several quotes from recommended builders and ask for references along with evidence of their insurance. When you receive the quotes ensure it is itemised and don’t forget about VAT. 

  1. Party Walls

You can’t start work until you have your party wall awards signed off! Speak to Davis Brown!

Side extension 2

  1. Inform your Insurer

Before you start work you will need to inform your insurer that you are carrying out works to the house and you may face an increase in your premium for the period of the build. If you fail to inform your insurers of the work you may not be covered if something happens during the build.

  1. Do you need a Rights of Light Survey?

Are you adjacent to another property with windows? In which case you will probably need a right of light survey.

  1. Tree Preservation Orders 

Check if he property has any TPO (Tree Preservations Orders), these are protected and cannot be removed.

  1. Ecology

Protected species like newts, reptiles and bats can stand in the way of development! If you anticipate any of these on your site you need to get an ecological survey undertaken.

  1. Drainage

You need to consider how the build will be drained and what it will link into such as a public sewer and in the case of surface water a soakaway.

Side extension 3

  1. Time Limits

Most planning consents expire after 3 years so don’t leave it too late once you have consent!

  1. Planning Refused

If your planning is refused all is not lost, you can go to appeal and if rejected there you can take it to the High Court.

  1. How much does a planning application cost?

The cost depends on the nature of the build. If you are constructing a new house it will be £462 for a full application whereas a home extension will generally be £206.

  1. What are Planning Conditions?

Sometimes the local authority will impose specific conditions like the materials you use.

  1. Scaffolding

If your scheme is using scaffolding you may need a licence especially if it’s on another owner’s land.

Side extensions1

  1. How Long Does it take to get Planning?

Once your application has been submitted and accepted as complete along with the fee the local authority are supposed to determine planning applications within 10 to 12 weeks of registration. The majority of straightforward householder applications will be dealt with within this time frame.

  1. What if I don’t get Planning Consent?

While it is not illegal to develop land without planning permission, it is not lawful and if you have failed to get consent for your project, then the local planning authority can take action to have the work altered or demolished. In this instance, you can make a retrospective planning application and if this is refused you can appeal the decision. If you lose, it can prove very costly.

Altering a listed building without prior permission is, however, a criminal offence, and in extreme cases it can lead to prosecution and unlimited fines — and even imprisonment. So do ensure you apply for this first.

 

 

20 Instagrammable Soho & Fitzrovia Faves: Part II

M E A R D  S T R E E T

Meard Street

Reputed to have been a street where ladies of the night worked in times gone by….

G A Y – O L D C O M P T O N  S T R E E T

GAY

Soho has a huge LGBT community and this nightclub is world famous.

T H E  Y A R D

The Yard - Colour

Soho’s most unique gay venue! It has a very pretty garden, tucked away in Rupert Street.

L I N A  S T O R E S

Lina Stores

This iconic family-run delicatessen is piled high with delicious home made pasta, cheese, cured meats & groceries.  Got your taste buds tingling?  You’ll find it on Brewer Street!

S O H O   S Q U A R E

Soho Sq

An oasis in the middle of Soho, just behind Oxford Street.  Have you ever wondered what’s inside the Tudor-style hut?  An urban myth claims it’s the entrance to a secret tunnel which leads to Buckingham Palace.  We can neither confirm or deny….

S O H O  H O T E L

Soho Hotel

Tucked away in Richmond Mews, this hotel is a great place to people watch (or celebrity spot), an very funky bar, with a library room and sometimes a cinema.

F I T Z R O Y  T A V E R N – C H A R L O T T E  S T R E E T

The Fitzroy Tavern

It would be hard to cover Fitzrovia without including it’s most famous pub.  This pub has been a haunt for many a London luminary over the years including Augustus John, Jacob Epstein & the famous occultist Aleister Crowley.

W A R R E N  M E W S

WM

The beautiful cobbled Warren Mews – hidden away off Warren Street, you wouldn’t think you were in central London!

B E R W I C K  S T R E E T M A R K E T

BERWICK

Street trading in Berwick Street started around the late 1770s, but wasn’t officially recognised as a market until 1892.  As you can see it’s still as popular as ever (had a lovely, juicy watermelon there this afternoon!).

T H E G R E E N  D O O R – 1 M A R G A R E T  S T R E E T

DBdoor

And we really couldn’t finish this without mentioning the only Racing Green front door in Fitzrovia “Ooh, who lives there?” You may be asking yourself, well it’s the home of the friendly Davis Brown team – pop along and see us anytime!

20 Instagrammable Soho & Fitzrovia Faves: Part I

Being Estate Agents in fabulous Fitzrovia, we know the best places to go to eat, drink, be merry & to simply just enjoy the often-unexplored delights this neighbourhood has to offer.  As my mother always said to me “When you walk, look up or you’ll miss so much”, and she was spot on, so with that in mind Emma and Hannah took to the streets in the morning sunshine with their cameras (iPhones) with the purpose of showing you the weird & wonderful in our local streets which you might have never known were there.  Here’s what we found…

1  C O L V I L L E  P L A C E

Colville Place is a paved court connecting Charlotte Street with Whitfield Street. It was planned as a double row of modest dwellings, three storeys in height in stock brick with a plain parapet masking the roofs. Each house had two sash windows on the first and second floors, and the entrance door, with rectangular fanlight, and one window on the ground floor.  An old lamp stands in the centre line where the sloping pavement from each side met.  It was named after John Colville – a carpenter who helped to build it.

Colville Place

2  L E A F  L O V E R – G R E A T  T I T C H F I E L D S T R E E T

Emma eyeing up the blooms on show at this new addition to the area.

Leaf Lover (florist - its just opened) - Great Titchfield Street

3  S A N D E R S O N  H O T E L – B E R N E R S  S T R E E T

I get the feeling, somebody’s watching me….  Soft yet sophisticated with a twist of surprise.

Sanderson Hotel

4  N E W M A N P A S S A G E

This narrow alleyway links Newman & Rathbone Streets.  Dripping with Victorian atmosphere you’d expect Sherlock Holmes to pop around the corner!

Newman Passage

5  C H A R L O T T E  S T R E E T  H O T E L

Charming & quintessentially British, looking resplendent with the addition of Bloomsbury Flowers London, spreading their flowery love!

Charlotte Street Hotel

6  F I T Z R O Y S Q U A R E & B T  T O W E R

Fitzroy Square was originally part of the Bloomsbury Conservation Area,  over the years it has become associated with high-end, bohemian residents, many of which have had prominent careers in the Arts, Virginia Woolf to name but one.

So much adoration for the BT Tower!  But there didn’t used to be … back in the day when it was built (1965) Fitzrovia was a haven for both artists and aristocrats & the BT Tower was met with harsh criticism as it was thought it’s design wasn’t compatible with the areas, The critics of the tower in the 60s have since reversed their opinion, calling it a “building of merit”.

Fitzroy Sq

7  T H E  A T T E N D A N T – F O L E Y S T R E E T

Is she popping down for a coffee, or to spend a penny?!

Foley Street - Fitzrovia's mini village

8  T H E F I T Z R O V I A  M U R A L – W H I T F I E L D  G A R D E N S

A historic mural painted in 1980, the mural depicts various unnamed characters of Fitzrovia, the top half painted by Mick Jones (son of trade union leader Jack Jones), and the bottom half by Simon Barber.

Whitfield Gardens (looked up on google for more info)

9  P E A R S O N  S Q U A R E

This square was named after the Victorian architect John Loughborough Pearson, who designed the site of the Middlesex Hospital which first opened in 1745.  The hospital is no longer there, but instead there is a modern – some might say Brutalist, development in its place.

Pearson Square (brutalist architecture)PL

10  F I T Z R O V I A  C H A P E L

This exquisite piece of architecture was part of the Middlesex Hospital and stands in Pearson Square.  A space offering an oasis of tranquillity, peace & calm, and is open from 11am to 4pm every Wednesday.

The Fitzrovia Chapet

 

20 Lease Extension Pointers

Calculator House, concept investment

 

  1. Whether you own a house or a flat, owning a leasehold means that you have a specified number of years to use the land subject to the conditions set out in a legal contract – the lease. There is usually a ground rent to pay and like any contract if the terms, known as covenants are breached, there are consequences.
  2. Before buying a leasehold ensure you check the length of the lease and ground rent, which are crucial to calculating the Premium for any lease extension. Historically, flat leases were usually for a term of at least 250 years with a peppercorn ground rent (essentially, no ground rent
  3. However, in more recent times freeholders have become shrewder, especially after the 2008 credit crunch. As the property bubble had burst, developers had to sell their developments for less than the price they had predicted they were going to achieve when the market was at its highest. Developers became creative on how to recover the money lost from the purchaser and this was typically done by granting a shorter lease of between 99 – 250 years and reserving a higher ground rents that increase periodically.
  4. There are 2 ways to extend your lease:
  5. Informal Route – Any leaseholder, whether or not they qualify for the statutory right to extend their lease can negotiate an open market deal.
  6. Under the informal lease extension process, the advantages include that you and the freeholder can negotiate the terms, the premium and any other associated costs and the whole process can be quicker as there is no control over timing, it can be instant if both parties are willing. A leaseholder has the option to just ‘top-up’ the lease term for a smaller premium if they are wanting to make the lease attractive to potential buyers.
  7. However, the disadvantages include that you are not protected by the safeguards provided by law around the calculation of the premium and any intermediate landlords interests and despite having spent time and money either party can withdraw from the process at any time until the contract is concluded. If an agreement cannot be reached there is no recourse to the Tribunal without triggering the statutory process.
  8. Statutory Route – Qualifying leaseholders have a legal right under the Leasehold Reform Housing and Urban Development Act 1993 (as amended) (LRHUDA 1993) to extend their lease.
  9. The advantages include that that as the whole process can take around 6-9 months, the leaseholder has time to find fund and there are statutory safeguards to compel the freeholder to extend the lease, how the lease premium is calculated and the terms to be put in place. In addition, any charge over the existing lease is automatically transferred to the new lease under Section 58(4) LRHUDA 1993 and the freeholder’s costs are controlled under Section 33 and Section 60 LRHUDA 1993.
  10. The disadvantages include that from the service of the Tenants Notice, both parties are locked in to the process and there is no guarantee about the premium payable at the outset. This is why we recommend that a valuation is carried out before the service of the Tenants Notice so that you have a realistic idea of what the premium ought to be. If an agreement cannot be reached there is a recourse to the Tribunal.
  11. Statutory Right to Extend Your Lease LRHUDA 1993 provides qualifying leaseholders to extend the lease on the following terms:    lease-agreement
  • An additional 90-year term to the unexpired term. For example, if you have 50 years left to run on your lease, after the lease extension you will end up with a lease with an unexpired term of 140 years
  • A lease on exactly the same terms as that which you have at the moment (subject to minor up-dating) and
  • All for a “peppercorn rent” (i.e. nil rent for the remainder of the term). Generally speaking, to exercise the right under the 1993 Act you must have a lease originally granted for a term of more than 21 years and you must have held your lease for at least two years
  1. Essentially, the 3 criteria a leaseholder of a flat must meet are:
  • 100% of the property is owned (i.e. not a specific percentage as in staircasing schemes)
  • The lease was originally granted for a term of more than 21 years
  • The leaseholder has held the lease for at least 2 years.
  1. The Premium -The “premium” is the price payable to the landlord (and any intermediate landlords) for the new lease. We would highly recommend that you obtain specialist valuation (which we can undertake for you) to calculate the price. Be aware of lease extension calculators as they can be misleading.
  2. The premium is calculated under the criteria set out in Schedule 13, Part II LRHUDA 1993, and is the total of:
  • the reduction in the value of the landlord’s interest in the flat; that is, the difference between the value of his interest now with the present lease and the value of his interest after the grant of the new lease with the extra 90 years.
  • the landlord’s share of the marriage value;
  • compensation for loss arising from the grant of the new lease. The reduction in the value of the landlord’s interest is, effectively:
  • the loss of the income from the ground rent for the remainder of the original term (as the whole term of the new lease will be at peppercorn rent);
  • the loss due to the additional 90 years wait for the reversion (the surrender of the flat at the expiry of the term).
  1. The freeholders will usually also instruct their own valuer and you will normally be liable for their valuers costs also.

16 .           Statutory Lease Extension Process – The basic leasehold extension process is as follows:

–                Under LRHUDA 1993, a Section 42 Tenants Notice must be served upon the freeholder and upon any intermediate landlords.

–                Although there is no prescribed form, the tenants s,42 notice must include specific detail set out in legislation, including the details of the lease, the freeholder, the premium you wish to offer and any additional proposed terms or covenants. If the tenants s.42 notice does not contain all the relevant information then it will be invalid.

  • The tenants s.42 notice triggers a timetable set out in legislation for the parties to follow. In brief:

–               The Freeholder has just over 2 months to serve a counter notice to either propose new terms or accept or reject your proposed terms.

–               From the service of the counter notice the parties have 2 months to negotiate the terms of the new lease.

–               The date terms are agreed triggers the timetable for the conveyance and completion.

  1. Disputes & Missing FreeholdersIf a dispute arises in relation to the premium or terms, an application to the First-Tier Property Tribunal can be made within a set time limit to independently adjudicate the terms.

If the freeholder fails to serve a counter notice, or respond at all or is missing an application can be made to the County Court for a ‘Declaration’ or ‘Vesting Order’. These situations do not bar you form exercising your rights and our experts can assist you with this if such a situation arises.

  1. Transferring The Right To Extend The Lease – If you are considering buying a leasehold flat with a short lease, you should negotiate with the current owner to exercise their right to extend the lease and pay some of the costs. Under Section 43 of LRHUDA 1993, once the statutory right to extend has been exercised it can be transferred to the owner.
  2. Why You Should Extend Your Lease – Once there are 80 years or less remaining on the lease term, the value of the property drops and the value of the freehold increases. Therefore, the cost of extending your lease becomes more expensive.

In addition, your property may become less marketable as buyers will be vary of the problems and the high-street mortgage lenders will not be able to lend against it. Therefore, if you have a shorter leasehold, you should think about extending your lease as early as possible.

  1. Obtain Expert Advice – You really need to obtain advice from professionals who are experts in this complex area of valuation and law, although lease extension calculators are available online they cannot be relied upon and may leave you paying more than is necessary.

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At Davis Brown, we understand that every lease extension is different, and we have in depth knowledge of the process and technicalities in this specialist area of valuation to obtain positive results.

Important Questions To Ask Before Buying A Property

Handing over the house keys from one person to another.

Whether you are buying your first home, a holiday home or an investment property, there comes huge financial commitment, and for some, the largest financial investment of their life – stressful times! With such a large financial commitment, you want to make sure you have all the information at hand to guarantee you are purchasing a worth while investment. We here at Davis Brown are here to guide you in the right direction with twenty key questions to ask prior to placing an offer on a property:

What is the Tenure? – is the property Freehold or Leasehold?

What is included within the demise? – demise refers to the premises that has been transferred in the lease. Often a roof terrace may not be demised to the property and can in fact be communal. Make sure you get all the facts! In addition, you may find a storage unit/garage is demised to the property.  

What is the length of lease? – having a short lease can at first seem great as the purchase price would seem ‘cheap’ – don’t be fooled! To renew a lease can cost tens of thousands of pounds.

Lease agreement document with keys and pen

How much is the service charge? – this is a charge made for the maintenance on a property which has been leased. This can sometimes take a large chunk out of your rental returns and therefore it is worth making sure it is not too excessive.

Is there a sinking fund? – a sinking fund will cover repairs for the building. If there is no sinking fund, you might be digging deep into your pocket for any essential building repairs.

How much is the ground rent? – this is the rent paid under the terms of the lease by the owner of a building to the owner of the land on which it is built. This is usually a small charge; however, it is certainly worth taking note of the cost.

Is the vendor in a chain? – if the vendor is buying a property and that sale falls through, would this affect your purchase?

What works have been carried out? – you will get a feel whether the building has been well maintained if external decoration and roof works have been carried out recently. It is important to know when the roof was last replaced, and the external façade was last decorated.

Colorful English houses facades in a row, pastel pale colors in London

Are there any scheduled works within the building or surrounding area? – if so are these covered under the service charge and sinking fund?

Is the agent or the seller aware of any new developments in the surrounding area? – demolition and extensive development will be noisy!

When was the last time boiler was serviced/changed?  

What is the rental value? – it is worthwhile knowing what the potential rental value would be should you ever decide to let the property. Calculation the yield will show you the rate of return on your investment.

What is the EPC rating? – the Energy Performance Certificate shows the energy efficiency rating from A (most efficient, to G (least efficient) and is valid for 10 years. If you are planning on renting the property, landlord would require a property with an EPC rating with an E or above.

Is there scope to extend? – with each extension comes an increased return (subject to current market). With room to extend, whether in the loft, an additional bedroom, garage conversion or another bathroom, having the room to extend maximises the potential growth of your investment.

Where is the nearest train/tube station & bus route? – properties that are located close to transport links come at a premium – but a worthwhile one! Properties that are located within proximity to transport links will always be an attraction should you decide to sell later down the line.

What schools are in the surrounding areas? – is the property set within a school catchment area? Properties that are historically increase in value over time as there will constantly be a demand for Real Estate within proximity to highly regarded schools.

What parking options are available? – permit Vs allocated off street!

No Parking Sign - Humorous

Who are my neighbours? – worth while making sure you don’t have an Air BnB next door!

Who are the managing agents?  – research who the managing agents are? Do they have a good reputation?

How close are the amenities? Having supermarkets, restaurants & cafés within a short commute would increase the rental price as these are all attractions to prospective tenants.