lease extensions

Before extending your lease, it is important that we review your lease and advise you on the two routes available – statutory or non-statutory, and which may be most appropriate for you given your circumstances. Our Litigation Team will deal with this aspect of the lease extension for you and tend to offer a fixed fee for this advice, which is confirmed upon enquiry.

Once we have reviewed your lease and advised you on your options, you will need to decide whether to proceed with a statutory or non-statutory lease extension.

Route 1: Non-statutory lease extension

A non-statutory lease extension occurs when a Leaseholder agrees to lease extension terms with their Freeholder.

If you have already reached out to your Freeholder and obtained an offer, then our Litigation Team can advise you on the offer, and if necessary undertake discussions with your Freeholder on your behalf to negotiate more favourable terms.

Once terms have been agreed with your Freeholder, or – if, upon receiving our advice, you are happy to proceed with your Freeholder’s offer – we pass your matter to our Residential Property Team. They will complete the lease and register it at the Land Registry.

Route 2: Statutory lease extension

As an owner of a Leasehold property, you have a statutory right to extend your lease and can do so using the statutory route. This means you can serve a notice on your Freeholder (referred to as a section 42 notice) requesting a lease extension.

Our Litigation Team process statutory lease extensions in the following stages:

Stage 1 (always necessary):

• Drafting the section 42 notice.
• Liaising with your surveyor in respect of the premium.
• Serving the notice on your Freeholder.
• Proving title (if requested by the Landlord) and dealing with any requests for a deposit on account of the premium by the Landlord.

Stage 2 (frequently necessary):

• If your landlord provides a counter-notice and does not agree to the terms we supply, we will advise you, take your instructions and negotiate with the Landlord or their representatives to agree on terms.

Stage 3 (rarely necessary):

• If you and your landlord are unable to reach an agreement, we will apply to the First Tier Property Tribunal for determination.
• We will deal with directions made by the Tribunal and attend proceedings if necessary.

Completion

Like with a non-statutory lease extension, once terms are agreed, the matter passes to our Residential Property Team who will agree the draft lease with your Freeholder and complete the extension.

Please note that you should expect to cover your Landlord’s legal costs and surveyor’s fees. These fees must be reasonable and our work includes negotiating those fees on your behalf.

Typical timescales

The average Lease Extension claim takes around 3-9 months, provided the other party engages promptly.

New legislation means big changes to the lease extension process. There are several changes coming.

For now, the key change is that you no longer need to own your property for two years before you can extend your lease.

When the rest of the reforms come into effect, they are set to include:

• 999-year lease extensions (instead of 90 years).
• Abolishing “marriage value”, which currently increases the cost of extending a lease when the term falls below 80 years.

So, should you extend now or wait?

• If your lease has more than 80 years left and your ground rent is fairly low, it may be cheaper to extend under the current rules.
• If your lease has fewer than 80 years remaining or you pay a higher ground rent, you may benefit from the upcoming reforms.

There is no clear indication when this new legislation will come into effect, and an ongoing legal challenge from Freeholders could delay its implementation, potentially for several years.

Every situation is different, and timing your lease extension carefully could save you a significant amount of money. Our team can guide you through the options and help you decide whether now is the right time to act.

Lease extensions can be complex, making it essential to have accurate and expert legal and valuation advice. We can help you with all aspects of a lease extension, from responding to the claim through to the matter’s completion.

The law:

Leaseholders – also known as tenants or lessees – have the right to extend their lease by a further 90 years without ground rent.

Freeholders are legally obliged to comply with this request, so long as:

• The property is a flat
• The lease had an original term of at least 21 years.

The process:

1. The Leaseholder initiates negotiations with the Freeholder. They can do this:
   1. informally using the non-statutory route
   2. formally, by issuing a Section 42 Notice via the statutory route.
2. The Section 42 Notice confirms the terms on which the Leaseholder wishes to extend their lease. It also confirms the sum (known as a premium) they propose paying the Freeholder to extend their lease.
3. If the Leaseholder serves a Section 42 Notice, the Freeholder must respond with a Counter-Notice by the date specified. This can include the sum they propose as acceptable for extending the lease.
4. Once the Freeholder has responded with a Counter-Notice, both parties have six months in which to agree on terms and complete the lease extension. If they cannot agree on a premium, they may apply to the First-tier Tribunal, which will consider expert valuations and decide a suitable premium and terms.

The average Lease Extension claim takes around 6–9 months, depending on how swiftly each party engages.