Lease Extension | Definition
A lease is a long-term rental agreement that typically lasts between 99 and 999 years. Once the period (lease term) expires, the leaseholder loses the right to use the property, and ownership of the lease will revert to the freeholder.
A lease extension is when a leaseholder extends the initial lease term on their property in return for a premium paid to the freeholder.
Qualifying leaseholders have the right to extend their lease term if:
- they held the lease (owned the property) for at least 2 years
- the original lease term was for 21 years or more
A valuation will need to be carried out and agreed upon and the premium will be paid to the freeholder in return for the lease extension.
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Chris Salmon, Director
About the author
Chris Salmon is a co-founder and Director of Quittance Legal Services. Chris has played key roles in the shaping and scaling of a number of legal services brands and is a regular commentator in the legal press.