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An overview of how to obtain a lease extension under The Leasehold Reform, Housing and Urban development Act 1993

May 11, 2023

The legislation

The Leasehold Reform, Housing and Urban development Act 1993 (“the Act”) provides leaseholders who meet certain qualifying criteria with a right to extend their lease by a further 90 years with a peppercorn (zero) ground rent.

To qualify, a leaseholder must satisfy the following:

  1. The leaseholder must own a long lease. A long lease is one granted for a term of over 21 years.
  2. The long lease must have been owned by a period of 2 years.

A leaseholder will not qualify if:

  1. The landlord is a charitable housing trust and the property is provided as part of the charity’s work[1].
  2. The lease is a business or commercial lease.

How to start the process

The informal route

This route involves contacting the landlord or the managing agent who act on behalf of the landlord directly. Some landlords are happy to negotiate the terms and premium payable informally with the leaseholder but this is not guaranteed and they may request that the formal route is followed.

The formal route

This route requires a s42 Notice to be served on the landlord. Within this notice, the leaseholder will need to set out certain information including the premium and terms that they are proposing for the new lease. The notice will set out a date in which the landlord is required to respond.

The landlord can either accept the notice and terms the leaseholder has set out or serve a counter-notice on the leaseholder setting out the terms they propose.

Alternatively, the landlord may claim that they have a right and intention to redevelop the building[2]. A landlord can only do this if the remaining term of the existing lease is less than five years from the date of the leaseholder’s s42 Notice[3].

If the leaseholder and the landlord cannot agree on the terms of the new lease, the matter will be referred to the tribunal for an independent decision on the issues in dispute[4].

If the formal route is used, it is recommended that the leaseholder appoints a surveyor who can assist with drafting the s42 Notice, assess the premium that the leaseholder should pay for the lease extension and negotiate on behalf of the leaseholder.

Costs

It should be noted that the leaseholder is responsible for paying the landlord’s reasonable legal and valuation costs. They will also be responsible for their own costs.

The above costs are in addition to the premium payable for the lease extension.

If you need any further information or would like to instruct us in relation to your lease extension, please contact the office to speak to a member of the conveyancing team.

[1] https://www.lease-advice.org/advice-guide/lease-extension-getting-started/

[2] https://www.lease-advice.org/advice-guide/lease-extension-getting-started/

[3] https://www.lease-advice.org/advice-guide/lease-extension-getting-started/

[4] https://www.lease-advice.org/advice-guide/lease-extension-getting-started/

Parris Ball
Trainee Solicitor – Residential Department

This article is for general information purposes only. It does not constitute technical, financial, legal advice or any other type of professional advice and is no substitute for specific advice based on your individual circumstances. We do not accept responsibility or liability for any actions taken based on the information in this article. For more information, please click here.