Share of Freehold Lease Extension: A Complete Guide

Owning a share of the freehold offers significant advantages, especially when it comes to extending your lease. Unlike leaseholders who rely on statutory rights under the Leasehold Reform, Housing and Urban Development Act 1993, share of freehold owners typically have more control over lease extensions. This guide explains how lease extensions work in share of freehold properties, the process involved, and how Fraser Bond can assist in ensuring a smooth and cost-effective extension.

What Does ‘Share of Freehold’ Mean?

If you own a share of freehold, it means you and other flat owners in the building collectively own the freehold. This can be structured in two ways:

1. A Freehold Company – A company owns the freehold, and each flat owner holds a share in the company.
2. Joint Ownership – The freehold is held in the names of the leaseholders as individuals.

This status gives leaseholders more control over building management and lease-related matters, including lease extensions.

Why Extend Your Lease if You Own a Share of Freehold?

Even with a share of the freehold, you still have an underlying lease, which loses value as it gets shorter. A lease with fewer than 80 years remaining can significantly affect a property’s resale value and mortgageability. Extending your lease early can help:

• Protect your property’s value
• Avoid costly ‘marriage value’ costs (applicable if the lease drops below 80 years)
• Make it easier to sell or remortgage
• Increase rental and resale appeal

How to Extend a Lease as a Share of Freehold Owner

Unlike standard leaseholders, share of freehold owners can extend their lease without paying a premium (as long as all freeholders agree). The process usually follows these steps:

1. Agreement Among Freeholders

Since you and your co-freeholders control the freehold, you can agree to extend your leases informally. This often means granting a 999-year lease extension at a nominal cost (peppercorn rent).

2. Drafting the Lease Extension Deed

A solicitor will prepare a Deed of Variation or a new lease document that reflects the extended lease term. This must be properly drafted and signed by all parties.

3. Registering the Lease Extension

Once the new lease terms are agreed upon and signed, they must be registered with the Land Registry to ensure the extension is legally recognised.

What If One or More Freeholders Refuse to Extend?

If freeholders cannot agree on an informal extension, an individual leaseholder may still use their statutory right under the Leasehold Reform Act 1993 to request a 90-year extension at a peppercorn ground rent. However, this process involves valuation costs and legal fees.

How Much Does a Share of Freehold Lease Extension Cost?

The cost of extending your lease as a share of freehold owner is usually limited to:

• Solicitor’s fees (£1,000–£2,500)
• Land Registry fees (£40–£100)
• Surveyor’s fees (if needed) (£500–£1,500)

If the lease is extended informally, no premium is payable, making it significantly cheaper than a statutory lease extension.

How Fraser Bond Can Help

At Fraser Bond, we specialise in leasehold property management and can guide you through negotiating and registering a lease extension with minimal hassle. Whether you’re a freeholder or leaseholder, our expert team ensures you get the best outcome.

Need help with a share of freehold lease extension? Contact Fraser Bond today for expert advice.