Lease Extension of Houses

Lease Law Limited can also act for landlords who have been served a lease extension notice from their tenant claiming a lease extension in respect of their leasehold house.

Am I required to grant a lease extension to the tenant?

Once instructed, we will investigate the validity of the claim notice that has been served on you and the entitlement of the tenant to extend the lease over their house. If we find any discrepancies we will ask the tenant’s solicitor to clarify these and will then advise you whether it is likely that the tenant has a valid claim for a lease extension.

If the tenant has a valid claim for a lease extension then you are required to grant a lease extension the tenant.

Does the tenant qualify to make a lease extension claim?

For the tenant to qualify for a claim to extend their lease of their house the following conditions must be fulfilled:-

  1. the claim must be made in respect of a building which is reasonably considered a house and divided vertically from any adjoining house; and
  2. the lease must be a long lease which was originally granted for a term of 21 years or more; and
  3. you must have owned the property for at least two years before you serve the initial notice (but you do not necessarily have to have lived in the property for the last two years); and
  4. you must meet the low rent test and the property must have a rateable value below a prescribed limit.

What is the cost to me of the lease extension claim?

The tenant is generally responsible for your reasonable costs in connection with the lease extension which will include your legal costs in connection with the legal aspects of the lease extension and your valuation costs for any advice required in respect of the new ground rent that will be payable following the expiry of the original lease term.

It must be noted that the tenant is not responsible for your costs in relation to any negotiations. The tenant is also not responsible for any costs that you incur in preparing for or attending a Tribunal hearing.

LEASE Law will recover their fees for acting on your behalf from the tenant on a time-cost basis, and if there are any additional costs that are not likely to be recovered from the tenant, we will provide you a breakdown of these estimated additional costs and obtain your agreement to the estimate before proceeding to carry out the work (this includes any Tribunal work).

How long will it take to finalise the claim?

We usually estimate that the procedure will take 6-12 months from the service of the initial notice to completion of the lease extension, however, there are no strict statutory time limits for progressing the claim, so please do be prepared for it to take considerably longer.

What is the procedure to extend the lease over my house?

The lease extension procedure is commenced when the tenant serves a formal notice on the landlord (in the prescribed form).

The landlord may then serve a notice in reply which must be served within two months of the date of the tenant’s notice. This notice should state whether the landlord admits the claim and if they do not admit the claim they must provide their reason why they do not admit the claim. If the landlord does not admit the claim, then the tenant must apply to the court for a determination of whether they have the right to extend their lease.

It must be noted that if the landlord does not serve a notice in reply then there may be subsequent cost consequences so we highly recommend that the landlord serves a notice in reply.

Provided that the landlord admits the claim, the parties’ representatives will enter negotiations with a view to agreeing the terms of the new lease including the provisions relating to the new ground rent. If the terms cannot be agreed then the parties can apply to the Tribunal to determine the terms.

In accordance with the regulations, completion of the sale should take place at least four weeks after the premium is agreed and either party can serve a completion notice on the other setting a completion date on the first working day four weeks after giving the notice.

How can LEASE Law help me?

LEASE Law are specialist solicitors who can act on your behalf in respect of the legal requirements for extending your tenant’s lease. LEASE Law will recover their fees for acting on your behalf from the tenant on a time-cost basis, and if there are any additional costs that are not likely to be recovered from the tenant, we will provide you a breakdown of these estimated additional costs and obtain your agreement to the estimate before proceeding to carry out the work (this includes any Tribunal work).

The work that we will carry out for you includes receiving and investigating the initial notice, investigating the leasehold and freehold titles to the house, preparing and serving the notice of reply on the tenant’s solicitor, drafting and negotiating the terms of the new lease and completing the lease extension. We will also liaise with your valuer in respect of the new ground rent as necessary.

We can recommend specialist enfranchisement valuers who have extensive experience and expertise in this area to advise you in respect of the new ground rent that you can expect to receive.

If you would like LEASE Law to assist you, please send a copy of the tenant’s initial notice or have a copy of the notice to hand, and contact Jade Wilson (jade@leaselaw.co.uk or 0204 511 9100) or Joanna Botley (joanna@leaselaw.co.uk or 0204 511 9101) for a no obligation discussion about the lease extension claim.