Extending the lease of a leasehold property

The Leasehold Reform, Housing and Urban Development Act 1993 (the 1993 Act) gives the leasehold tenants of flats the right to acquire a new lease on the payment of a premium subject to the fulfilment of the statutory criteria (the Formal Route) or by asking the freeholder to negotiate a new lease (the Informal Route). The exercise of this right is more commonly known as a lease extension

Informal route

Under the informal route, a leaseholder can approach the freeholder to ask whether they will negotiate a lease extension.

There is no obligation on the freeholder to respond or even agree to the lease extension. If the freeholder does agree, the parties will negotiate.

Starting the process informally could save time and money.

However, there are risks with going down this route, as the freeholder may only agree to extend the lease by including onerous terms in the lease or for a high premium.

Formal route

Under the formal route, which will be described further below, offers more protection for a leaseholder. However, there is a procedure and strict timescales that must be followed.

The right under the formal route is to add 90 years to what is left on the existing lease at a ‘peppercorn rent’, which means that no ground rent is paid.

However, the landlord is entitled to a premium for extending the lease, which is based on a formula set out in the 1993 Act.

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How our Property Litigation Team can help

  • Draft and serve or advise on the validity of the initial notice and any counternotice
  • Issue and advise you on your claim to extend your lease or purchase the freehold of your house
  • Document the extension or purchase of the freehold

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Qualifying for a lease extension

The right to extend your lease depends on you meeting certain conditions.

To be a qualifying leaseholder

It must be a long lease, originally for a term of more than 21 years, which you must have held the lease for the past two years (the right can be assigned if you are looking to sell the property).

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The procedure for extending a lease

The procedure for extending your lease is set out in the 1993 Act and it has strict timescales.

The first step would be to serve a section 42 notice.

However, to do this you will need to have instructed a surveyor to determine the valuation as a valuation needs to be included in the notice.

Once the section 42 notice has been served, it has the consequences of you not being able to serve another notice whilst that one is in force.

If the notice is withdrawn, no further notice can be given for a period of 12 months.

You (and any joint leaseholders) should sign the notice.

Case law has suggested that you can authorise an agent to sign the notice.

You can serve the notice in person or post it to the landlord’s last known address in England and Wales.

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The landlord’s response

The landlord must serve a notice in reply within not less than 2 months after service.

This is referred to as a counter-notice.

Any landlord has the right to access the flat for valuation purposes and they may require the tenant to pay a deposit and/or deduce title.

The landlord can ask for a deposit of greater than £250 or 10% of the premium or other sums payable as proposed in the tenant’s notice.

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Procedure following the date allowed for the landlord`s reply

If the landlord admits your claim in the notice in reply, the procedure to follow is governed by the regulations, which set out the conditions of sale. These apply as well as the negotiations to agree the price. If the price and terms are not agreed between 2 months and 6 months after the service of the counter-notice either party may apply to the First-Tier Tribunal for determination. The fee for applying to the tribunal is £100, and the hearing fee (once you receive notice of a hearing date) is £200.

The tribunal’s decision becomes final after 28 days. If you do not agree with the tribunal’s decision, you can appeal to the Upper Tribunal (Lands Chamber) before the decision becomes final, but only if you have the tribunal’s permission. After the tribunal’s decision becomes final, you and the landlord have two months to enter into the new lease and if you do not enter into the new lease within two months of the tribunal’s decision becoming final, you have a further two months to apply to the court to order the landlord to meet their obligations.

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Residential Lease Extensions Case Studies

Client Intro: Owner of residential property

Our client has a long leasehold interest in a residential property. They instructed us to use the statutory procedure under the Leasehold Reform Housing and Urban Developments Act 1993 (as amended), Part 1, Chapter II, Section 24 to extend the lease.

An agreement was reached and the lease was extended.

Client Intro: Purchaser of residential property

Our client was buying a long leasehold interest in a residential property. The lease was coming close to having less than 80 years on it (at which point it become difficult to obtain a mortgage) and, if our client purchased the property, they would have to wait two years before they could initiate a lease extension.  Therefore, it was agreed that the seller would serve a section 42 notice and would assign the benefit of that notice to our client as part of the purchase of the property. We prepared the notice, assignment and documented the extension once it had been agreed.


Our Property Litigation Team

Home-grown or recruited from national, regional or City firms. Our specialists are experts in their fields and respected by their peers.

Laura Pile

Laura Pile

Laura is a Partner and Head of our Property Litigation Team

Karen Taylor

Karen Taylor

Karen is a Senior Associate in our Property Litigation Team

Jennifer Hartley

Jennifer Hartley

Jennifer is an Associate in our Property Litigation Team

Vikki Wright

Vikki Wright

Vikki is a Solicitor in our Property Litigation Team

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