The right to extend your lease term – a brief guide to the statutory process
The current legislation governing statutory lease extensions sets out a clear framework and timetable under which flat owners can ask their landlord to extend the term of their lease. Generally a tenant who has owned a long lease for more than two years will be entitled to extend the existing term of their lease by an additional 90 years.
The new lease will be granted on the same terms as the existing lease of the flat, except that the ground rent payable to the landlord will be reduced to nil. Variations to other terms of the existing lease are generally restricted to when there is a defect in the current provisions.
The process is started by the tenant serving a notice on their landlord setting out the premium the tenant proposes to pay for the new lease. This premium is determined by a professional surveyor and is based upon a number of factors including the market value of the property and the number of years remaining on the current lease.
The landlord is given a period of just over two months to respond with a counter notice within which they will make a counter proposal to the premium to be paid. The parties are given a period of up to six months from the landlord’s counter notice to negotiate the premium to be paid and the terms of the new lease. If however the parties are unable to reach agreement they can ask the First Tier Property Tribunal to determine these issues. Once the terms of the lease extension are agreed or determined by the Tribunal, the legislation sets out a further period of four months within which the lease is to be completed.
It is often difficult to predict at the outset how long a statutory extension will take, as this will depend on how quickly the parties can agree the terms of and whether they can do so without needing to have these determined by a Tribunal.
The statutory route is a very technical process and any tenant should consult an experienced legal practitioner to guide them through the process.
If you are considering a lease extension and would like further information please contact Poonam Aujla 020 7288 4754 email@example.com in our leasehold enfranchisement team.