Extending your lease

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A lease extension is a statutory right for leaseholders if:

  • they fully own the property
  • they've owned it for more than two years
  • the existing lease is for more than 21 years

The new lease will be:

  • extended by 90 years
  • on the same terms as the current lease as far as possible (subject to minor modifications and exclusions)

If we do not own the freehold and there is less than 90 years remaining on the lease, then your solicitor will deal directly with the freeholder.

Why you might extend

When the number of years remaining on your lease falls below 70 years, the property becomes more difficult to sell. Purchasers want a reasonable length of time remaining on the lease when they in turn want to sell on. Lenders are also unwilling to offer mortgages on properties with insufficient years remaining.

If you are selling your property, provided you have correctly served your notice, your purchaser will benefit from your right to extend the lease and will not have to qualify themselves.

How to extend

You can extend your lease by the statutory route. For this you must serve a notice on us. The notice must be in the form stipulated by Section 42 of the Leasehold Reform, Housing and Urban Development Act 1993.

It is very important to get good independent legal advice and support regarding extending your lease. 

We would recommend that you discuss extending your lease with a valuer before you proceed. This will give you an approximate indication of how much it might cost. You can also get an indication of how much it might cost to extend your lease using a calculator on the Leasehold Advisory Service website.

When you are ready to proceed you should appoint a solicitor and a valuer and they will indicate the valuation for the extension in the notice (this is called a Section 42 Notice).

Getting a valuer

You will need a valuer as they will help you to: 

  • carry out the valuation to assess the premium 
  • give you advice on the offer you make to us 
  • advise you on our response to your offer 
  • negotiate with the council 
  • provide expert evidence if necessary at a First-tier Tribunal (FTT)

There is a set procedure for agreeing the price. The valuation will be fixed at the date you apply for the extension.

The formula that the valuer will use to arrive at the valuation is based on the following factors: 

  • The reduction in value of the council’s freehold interest by the lease extension, which in some cases may be loss of a ground rent. 
  • If your current lease has less than 80 years remaining, the valuation will take account of a marriage value. This is the difference between the value of our interest in your property under the current lease arrangements and our value in the lease with the additional 90 years and is shared equally between us.
  • Compensation for loss arising from the grant of the new lease. This is compensation for our loss in respect of other leases that have not extended their interest. 
  • Our reasonable costs of dealing with this application (as noted below).

We suggest that your valuer provides a “best” and “worse” valuation as the eventual price is likely to be agreed somewhere in between. 

You will be responsible for all your costs (valuer and solicitor) and our legal and valuation costs as well. 

If you qualify and are ready to proceed, your solicitor should serve a valid Section 42 Notice to us.

Our response

We have two months to respond to a Section 42 Notice.

We will either: 

  • Agree your right to the new lease and either accept the terms or propose what we consider to be the valuation. There will then be a period of between two and six months to finalise the valuation. During this time either party may apply to the First Tier Tribunal if the valuations cannot be agreed. 

Or: 

  • Deny you the right to the lease if the building is planned for demolition and redevelopment. Again this would need to be confirmed in County Court and only applies to very short leases. 

If we fail to respond to your notice, you have the right to apply to the County Court. They will make a vesting order and will determine the terms of the extension on the terms first proposed in your Section 42 Notice.

Further information

Contact the leasehold services team for further information:

Hounslow House
7 Bath Road
Hounslow
TW3 3EB

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