Residential Lease Extensions

If you own a flat, maisonette or apartment on a long lease, the value will reduce as the term granted by the lease also reduces.

If you are unable to agree to a residential lease extension with your landlord (usually the freeholder), subject to satisfying certain qualifying criteria, or if you have owned your property for 2 years or more, you will have the right under the Leasehold Reform, Housing and Urban Development Act 1993 (“the Act”) to apply for a ‘statutory’ lease extension. For further guidance and advice on the law on Lease Extensions check out our guide or find out more on the procedure details.

How to get a statutory lease extension?

Upon agreeing on a premium, your landlord will have to extend the lease by adding a period of 90 years to the term remaining under your current lease, and reduce any ground rent that may be payable to a peppercorn (small cash payment or other consideration).

The premium which should be offered to your Landlord will be calculated by a leasehold valuer, based on a formula set out in the Act. This premium is very much a matter for negotiation but the valuer will recommend how much should be offered, as well as provide both a best and worst-case scenario.

The statutory lease extension process

Once a valuation for your residential lease extension has been carried out, the statutory process will begin by the service of a ‘Tenants Notice’ in a form prescribed under the Act (“the Notice”), in which the offer is put forward to the landlord.

At this stage, you should be aware that you will become liable, not only for your own valuation, legal costs, VAT and any disbursements (payments to a third party i.e. the Land Registry for a copy of your title and current lease), but you’ll also become liable for the reasonable valuation fees and legal costs plus VAT incurred by your landlord, whether or not the matter proceeds to completion. You will also be required to pay an initial deposit equal to 10% of the premium offered in the Notice, or £250, whichever is the higher.

Counter-notices from landlords

The landlord must issue a counter-notice at least 2 months from the date of receiving the Notice, either accepting the premium offered or alternatively rejecting this and making a counter offer of their own.

If a counter-notice is not served by the Landlord within the prescribed time, you may apply to the court within 6 months of the date when a counter-notice should have been received, for a vesting order which the court will grant on the terms proposed in the Notice.

If a counter-notice has been received your valuer and your landlord’s will negotiate to agree upon a premium between the two parties. You or the landlord can apply to the Tribunal for a decision, but the application must be made no sooner than 2 months from, but within 6 months of, the date the counter-notice is served.

For further useful information and legal guidance, you may wish to visit the government-funded independent lease advice website. If you require any assistance with your residential lease extension, get in touch with an expert member of our leasehold solicitor team on 01202 525333 or by sending us an email enquiry.


How can I extend my lease?

It is possible to agree an extension for a new lease informally with your landlord. However, if not, then the Leasehold Reform Housing and Urban Development Act 1993 provides a mechanism for extending or obtaining a new lease.

To qualify under the Act you have to have owned your flat for a minimum of 2 years. Although people refer to “extending” a lease, in reality you will be granted a new lease for a term of 90 years plus the unexpired term of your existing lease.

The ground rent payable under the new lease will be nil but all the other terms of your lease will remain the same.

A premium is payable for the new lease and this is calculated by using the valuation method set out in the 1993 Act. It is a complex procedure and ideally should be carried out by a valuer with the requisite expertise.

The procedure is started by sending a Notice to your landlord claiming the right to a new lease under Section 42 of the 1993 Act. Your landlord has 2 months to send a counter notice in response stating whether the right is accepted and whether the premium is agreed. Usually the premium offered is disputed and the parties’ valuers enter into negotiations. If agreement cannot be reached then an application canto be made to the Property Tribunal to determine the premium.

You will be responsible for your own and your landlord’s reasonable costs of the process.

How much will a lease extension cost?

In addition to the premium to be paid for the new lease, there are additional costs involved in your lease extension. You will be responsible for payment of both your own and your landlord’s solicitor’s and surveyor’s fees. You should allow between £3500 and £4500 to cover these costs.

How long does it take to get a lease extension?

If you are using the statutory procedure then most lease extensions are agreed within 4 to 6 months.

What is a Section 42 Notice?

A Section 42 Notice is the notice sent by a lessee/ tenant to the landlord/freeholder claiming the right to a new lease under the Leasehold Reform Housing and Urban Development Act 1993. The Notice has to contain specific information provided by the Act. The landlord/freeholder has 2 months from service of the Notice to serve a counter notice.

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