You are the freeholder, intermediate leaseholder, leaseholder, or purchaser of a flat and want to know about the Statutory Process for Lease Extensions under the Leasehold Reform, Housing and Urban Development Act 1993.
Statutory Process. The qualifying criteria.
The lease must have been for a term originally exceeding 21 years, not be a business tenancy and the current lessee must have owned the flat for more than two years before the date of a Claim to extend. If the flat is being sold, it is possible for the vendor to begin the lease extension process by serving Notice of Claim, and assigning the Benefit of the Notice to the purchaser.
Statutory Process. Can the tenant or their purchaser extend the lease if either have more than one flat in the building?
There is no limit on the number of flats that a lessee can own in a particular building and they can extend the leases of any or all of them, provided the qualifying criteria is met.
Statutory Process. Can beneficiaries of a deceased tenant extend a lease?
The personal representative of a deceased tenant can make a Claim to extend a lease, provided they do so within two years from the date of grant of probate.
Statutory Process. If the tenant or their purchaser can extend the lease, what are they entitled to acquire?
If a lessee satisfies the qualifying criteria, they, or their purchaser assuming the vendor is willing to serve Notice of Claim, and assign the benefit to them, are entitled to a 90 extension of the existing lease, at a peppercorn rent, but otherwise on the same terms as the existing lease, except for limited variations prescribed under the 1993 Act.
Statutory Process. Valuation advice and calculation of premium.
Before making a Claim, the tenant, or if the flat is being sold, their purchaser should obtain valuation advice. We are able to provide this. For more information on how the premium is calculated see What premium will I receive? if you are a freeholder or intermediate leaseholder or What premium will I have to pay? if you are a tenant or purchaser.
Statutory Process. Making a Claim
It is possible to serve a preliminary notice to obtain information.
If lessees have, or obtain sufficient information they are able to serve Notice of Claim, to include:
- A description of the Flat;
- Sufficient particulars to establish that the lease qualifies;
- A proposed premium; (we are able to advise on this)
- Proposed terms of the new lease; and
- The date by which the Competent Landlord must serve a Counter-Notice, being not less than two months of the date of the tenant’s Notice of Claim.
Statutory Process. Deposit
The competent landlord is likely to respond with a Notice, requiring the payment of a deposit of 10% of the premium offered, and requesting the tenant to deduce title.
The Competent Landlord’s valuer is likely to inspect the flat, in order to undertake a valuation. We are able to advice on this.
Statutory Process. Counter-Notice
Within the period stated in the Notice, the Competent Landlord must serve a Counter-Notice stating whether or not the Claim is admitted. If it is not, then the Tenant must decide whether to dispute the rejection through the Courts. There are circumstances under which the Competent Landlord can resist a Claim on the grounds of redevelopment.
If the Claim is admitted, then the Counter Notice must state, amongst other things:
- Which of the proposals contained in the tenant’s Notice are acceptable;
- Which of the proposals contained in the Notice are not acceptable; and
- The Competent Landlord’s counter-proposals, which often include a higher premium.
Statutory Process. Application to First Tier Tribunal (Property Chamber)
If either the terms of the lease or the premium remain in dispute two months after the date of the Counter-Notice, either party can apply to the First Tier Tribunal (Property Chamber), for the matter in dispute to be determined. This claim must be made within six months of the date of the Counter-Notice otherwise there is a deemed withdrawal, and the tenant will have to wait one year before being able to serve another Notice, or two years from the date of registration at the Land Registry, in the event of the flat having been sold.
Statutory Process. Notice of Separate Representation.
Any Intermediate Landlord is at any time after service of the Counter-Notice by the Competent Landlord, entitled to serve a Notice to be Separately Represented in any legal proceedings.
Statutory Process. Conveyancing.
Once the terms of the lease and the premium have been agreed, or determined by an First Tier Tribunal (Property Chamber), or the Upper Tribunal (Lands Chamber) the conveyancing process is required to follow a statutory process / timetable.
Statutory Process. Withdrawal of Notice
The tenant can withdraw at any time, and there are provisions for the tenant’s Notice to be considered withdrawn, if strict time limits are not met. If the tenant withdraws, they are still required to pay the recoverable legal and valuation costs of the Competent Landlord and any intermediate leaseholders. Provided a deposit has been paid, this is refunded plus interest, less the recoverable costs.
Statutory Process. Further lease extensions.
There is no limit to the number of times that a lease can be extended, so long as the tenant pays the premium and the recoverable costs for each extension.
Statutory Process. Appeal
There is a right to appeal to the Upper Tribunal (Lands Chamber) on certain grounds, and within a prescribed period after a determination by a First Tier Tribunal (Property Chamber).
Our services: We are able to advise on the premium for the extension of a lease or leases of flat/s. We are able to advise on figures for the Counter-Notice for Freeholders, and Intermediate Leaseholders; or for the Notice, for lessees or purchasers. We are Chartered Surveyors, Regulated by RICS, with Registered Valuers that are experts in lease extensions and enfranchisement. We are also able to provide further information about Statutory Process – Lease Extensions.
