Maryland leases on residential properties are gradually decreasing in value. The shorter the remaining lease term becomes, the less it is worth – and accordingly any extension of the lease gets more expensive. It is the case that most Maryland tenants have the right to extend their lease by an additional 90 years in accordance with the 1993 Leasehold Reform Act. If you are a leasehold owner in Maryland you would be well advised to see if your lease has between seventy and ninety years remaining. In particular once the remaining lease term slips under eighty years, the premium due on any lease extension increases dramatically as part of the premium you will incur is what is known as a marriage value
It is conventional wisdom that a residential leasehold with in excess of one hundred years unexpired lease term is worth roughly the same as a freehold. Where an further ninety years added to any lease with more than 45 years unexpired, the property will be worth the same as a freehold for decades to come.
| Lender | Requirement |
|---|---|
| Accord Mortgages | 85 years from the date of completion of the mortgage. Please ensure that you explain the implications of a short term lease to the borrower. |
| Barclays plc | Leases with less than 70 years at the commencement of the mortgage should be declined (see exception below). Leases with greater than 70 years but fewer than 85 years remaining must be referred to issuing office. Leases with fewer than 70 years should only be referred to the issuing office where the following scenario applies, as discretion may be applied subject to bank approval: • Property is located in any of the following prestigious developments: Cadogan, Crown, Grosvenor, Howard de Walden, Portman or Wellcome Trust Estates in Central London AND • The value of the property subject to the short remaining term is £500,000 or more AND • The loan to value does not exceed 90% for purchases, 90% like for like re-mortgages, 80% for re-mortgages with any element of capital raising and 80% for existing Barclays mortgage borrowers applying for additional borrowing; |
| Lloyds TSB Scotland | Minimum 70 years from the date of the mortgage. |
| Skipton Building Society | 85 years from the date of completion of the mortgage For Buy to Let cases: - lettings must not breach any of the lessee’s covenants; and - consent of the lessor to lettings must be obtained if necessary |
| Yorkshire Building Society | 85 years from the date of completion of the mortgage. Please ensure that you explain the implications of a short term lease to the borrower. |
Lease extensions in Maryland can be a difficult process. We recommend you get guidance from a conveyancing solicitor and valuer with experience in lease extensions.
We provide you with an expert from a selection of lease extension solicitors, which ensures a targeted and efficient service as you have a dedicated port of call with an individual lawyer. Our lease extension solicitors have a wealth of experience dealing with Maryland lease extensions and further afield, as well as any potential issues which may arise as well as problems with the Leasehold Valuation Tribunal.
Trailing lengthy correspondence with the freeholder of her studio flat in Maryland, Paige initiated the lease extension process just as the lease was nearing the critical eighty-year threshold. The legal work was finalised in October 2011. The freeholder’s costs were negotiated to approximately 600 GBP.
Last Christmas we were phoned by Dr Logan Reed , who moved into a ground floor apartment in Maryland in October 1999. We are asked if we could shed any light on how much (roughly) price would be for a ninety year lease extension. Identical homes in Maryland with an extended lease were worth £257,800. The average amount of ground rent was £65 billed quarterly. The lease terminated in 2090. Having 65 years left we calculated the premium to the landlord for the lease extension to be between £18,100 and £20,800 not including expenses.
An example of a Lease Extension matter before the tribunal for a Maryland premises is 151A Ham Park Road in May 2010. The matter came before the Tribunal by way of a vesting order made on 12 June 2009 Deputy District Judge Coonan in Bow County Court. The tribunal decided that the sum payable for the m to be paid for the lease extension was £21,445 This case was in relation to 1 flat.