How to extend your Lease of leasehold house or flat under various Acts and regulations – Leasehold Reform Act 1967, 1993 and later.
A specified form of Notice may be served under the Leasehold Reform Act 1993 by a ‘qualifying tenant’ with the right to acquire a new lease of a flat. s42/1993.
A ‘qualifying tenant’ is a tenant of a long lease who has been the owner for the period of two years before the relevant date of notice. s39(3).
The notice may be withdrawn or can be deemed to be withdrawn and then will cease to have effect. Where there is withdrawal of a s42 notice then no subsequent notice may be given within twelve months of the date of withdrawal.
This may have consequences where there is a change of tenant or a movement in price. s42(7).
The form and content is important and notice must be addressed to the landlord and any other third party referred to in the tenant’s lease and must:
- give the full name of the tenant and address of the flat
- give details of the flat to identify it and details of the lease to identify it
- specify the premium which the tenant proposes to pay for the grant of a new lease
- specify any other terms that the tenant wishes to have included
- state the name of the person who will act
- give the date by which the landlord must respond by giving counter-notice under s45
- be signed
In the case of the death of a person who was a qualifying tenant then the personal representatives have the same right within two years of a grant of Probate or letters of Administration.
Where a notice has been given by a tenant the right can be passed to another party by assignment. s43.
If the flat is assigned without the benefit of the notice then the notice is deemed to be withdrawn.
After notice is served
The landlord must serve a counter-notice by the date specified in the tenant’s notice and either admit the right to the grant of a new lease set out in the notice or indicate that the landlord either wishes to redevelop or has other grounds to oppose.
In respect of any opposition the landlord should set out a counter-proposal. s45(3).
The landlord has a right to inspect the premises for the purpose of getting a valuation of his interest. s44.
The landlord can require a deposit of 10% of the price set out in the tenant’s notice.
Refer regulation 3(2)
Schedule 2 of The Leasehold Reform Regulations 1993
An application must be made to the Court not later than two months from the date of the counter-notice if the landlord’s counter-notice does not accept the right of the tenant to apply for a new lease.
Where there is a dispute relating to the terms of a new lease then either the landlord or the tenant may apply to the court within two months of the date of the counter-notice but not later than six months after the date of the counter-notice.
It is vital that this time limit is not overlooked by either party. s48.
Where the tenant’s notice has been given but the landlord fails to give a counter-notice the Court may on the application of the tenant make an order dealing with the proposals in the tenant’s notice. Similar procedures apply where terms are agreed and the new lease has not been concluded. s49.
The tenant’s notice is deemed to have been withdrawn at the end of the period for application to the Court if no application has been made. s53.
The right to a new lease is for a lease in substitution for the existing lease on payment of a premium at a peppercorn rent for a term expiring ninety years after the term date of the existing lease. s56.
The terms of the new lease will be the same as the existing lease but with modifications as necessary to the circumstances or subject to modification for redevelopment.
Where the interest of either party is subject to a mortgage then the new lease is deemed to be binding and authorised against the mortgagee. s58.
The costs payable by the tenant include the costs of the landlord for dealing with the notice and obtaining a valuation of the flat and the costs of the grant of a new lease. s60.
In addition to the premium, the tenant must pay additional amounts for any intermediate landlords.