Lease Extensions and Property Management
Formal Lease Extension Process
If you proceed under the formal procedures under the Leasehold Reform, Housing and Urban Development Act 1993, you should follow the process outlined below:
- Your first step is to obtain a ‘best and worst case’ valuation from a suitably qualified valuer/surveyor – we can recommend valuers/surveyors to you.
- Once you have obtained a valuation and are happy to proceed we would prepare a “Notice of Claim” which is served on your landlord.
- On receipt of your Notice of Claim, your landlord can request the following from you:
- Proof of your right to a lease extension – normally this is evidence showing that you have owned the property for at least two years.
- A deposit of 10% of the amount offered in your Notice of Claim
- Access to your property so that an inspection can be carried out for your landlord’s own valuation purposes
- Your landlord must serve a Counter-Notice (known as a Section 45 Notice) in response to your Notice of Claim within 2 months of receiving your original Notice. The Counter-Notice will state whether or not the landlord accepts your right to a lease extension.
- Usually the landlord will accept your right to extend the lease (as this is a statutory right) but may not agree to some of your terms in your Notice of Claim (the most common term in dispute is the purchase price). If this is the case, the Counter-Notice must contain counter-proposals.
- If your landlord fails to respond to the Notice of Claim you will be entitled to make an application to the Leasehold Valuation Tribunal for a determination that the lease extension be granted on the terms set out in your Notice of Claim.
- Once we have received the landlord’s Counter-Notice, if there are any terms that are disputed, negotiations then take place to try and agree the terms. If this is to do with the price the negotiations may be done by the surveyors. If the terms are agreed through negotiation a new extended lease is then granted with which we would deal.
- If a price cannot be agreed either party can apply to the Leasehold Valuation Tribunal to determine the matters in dispute.
The last date by which you must make an application to the Leasehold Valuation Tribunal if terms have not been agreed is within 6 months of the date of the landlord’s Counter-Notice otherwise your Notice of Claim will be deemed withdrawn and you will not be entitled to serve another Notice of Claim for a period of 12 months.