What is a voluntary lease extension?

A voluntary lease extension is when you have an agreement with the freeholder to extend your leasehold term. Under this circumstance a lease extension may be straightforward.

What is a statutory lease extension?

A statutory lease extension is when the freeholder does not agree or is proposing unreasonable terms. The government has a piece of legislation that enables you to extend your leasehold agreement for an additional 90 years, plus a nil ground rent term is applied. But, to qualify you must have owned the property for more than 2 years.

Paying the freeholder to extend your leasehold term

The freeholder will ask for a deposit to be paid. Typically, this will be 10% of the fee that you agreed to pay for your lease extension. In addition, the freeholder will also request access to the property to carry out a valuation of the property.

As a result, the freeholder will then serve a counter-notice. Usually, this admits the claim and will contain counterproposals in respect of the fee to be paid.

What happens if my lease extension is rejected?

In order to reject the claim, the freeholder must make an application to the court and prove the grounds for the rejection.

Taking your case to a tribunal

Rarely, it might be necessary to make the application to the Tribunal to protect your claim (because time is running out and terms have not been agreed upon) it is rare for the Tribunal to actually decide the lease terms. Normally, this is because a hearing at the Tribunal is to determine the cost payable to the freeholder, if it’s too expensive for example, or if the terms are unreasonable. Therefore, they would only be advised where the difference between the valuers is significant and the gain would warrant any potential costs.

How can Attwells help?
  1. Firstly, your lawyer will serve an S.42 Notice to the freeholder. This notice will set out the basic details about the property and the fee you would be willing to pay for the extension.
  2. Next, the freeholder has the right to respond. This is with a counter-notice, which sets out their terms. Typically, this is followed by a period of negotiating which your lawyer will do on your behalf.
  3. Finally, the lease extension is agreed upon.
Our FAQ and articles are correct at the time of writing.
These have been created for marketing purposes only and should not be considered as legal advice.