The right to extend the lease on a flat is granted by the Leasehold Reform, Housing and Urban Development Act 1993 (“the 1993 Act”). This Act made leasehold extension much easier and it laid down the process by which leaseholders must abide if they want to take advantage of their right.
The law says that, as long as a leaseholder has owned his/her flat for at least two years, he/she can extend their lease for 90 years on top of thier unexpired term and pay a peppercorn (i.e nil) ground rent for the remainder of the term. This essentially means that there is no ground rent to pay on the new lease and this is one of the reasons extending leases are popular with so many people.
The law is also very clear about the process by which lease extension can take place and it is advisable that anyone thinking of doing so instructs a solicitor who specialises in lease extensions as they will be able to guide you through the process and take care of much of the work for you. The 1993 Act lays down the criteria that people must meet if they want an extended lease. They need to have owned (but not necessarily have lived in) the property for at least two years and their original lease must have had at least 21 unexpired years on it.
Once you’ve made the decision to extend your lease, the first stage, as laid down by the 1993 Act ,is to prepare a Notice, which the tenant must serve on the landlord. This sets the whole process into motion and from that point on, the tenant seeking leasehold extension will be responsible for the landlord’s professional fees. Before serving the notice, you will need to gather certain information relating to the landlord and documents from the Land Registry that relate to the freehold of the property.
Once the Notice has been served, the landlord must issue the tenant with a Counter Notice. This can do one of three things: admit your right to extend the lease, refuse with reasons, or refuse on grounds that the property is due to be redeveloped. Generally speaking, the first option is by far the most common outcome. The landlord must typically respond within 28 days.
Following this and agreement between the tenant and the landlord in terms of price, a new lease must be drawn up to reflect the agreement. If you are ever in any doubt about how to extend a lease, get in touch with a specialist lease extension solicitor who will be able to give you comprehensive guidance.
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