Lease Extension Of Flats

Published date16 March 2021
Subject MatterReal Estate and Construction, Real Estate
Law FirmBirketts
AuthorMs Hannah Stammers

An analysis of the statutory and voluntary routes from a tenant's perspective

If you own a leasehold flat, you may be entitled to a statutory lease extension. Alternatively, your landlord may be willing to extend your lease voluntarily.

In this article, I provide a brief outline of the main benefits and disadvantages for each type of lease extension from a tenant's perspective.

The process for extending the lease of a house is governed by different legislation. If you have any queries regarding a leasehold house, please do not hesitate to contact the Enfranchisement Team.

Statutory lease extension

A statutory lease extension is governed by the Leasehold Reform, Housing and Urban Development Act 1993 (Act) which provides a framework within which the extended lease is negotiated and granted.

Benefits of a statutory lease extension

  • You are guaranteed to have 90 years added to the term of your lease.
  • Your ground rent will be reduced to a peppercorn (nil).
  • Your landlord is limited as to the amendments they can make to the lease.
  • There are strict timeframes and deadlines to serve notices and deadlines to complete the lease extension.
  • If the landlord fails to agree the terms of the new lease or the premium, you are entitled to ask the Tribunal to determine these.
  • If the landlord refuses to complete, you are entitled to ask the Court to force them to do so.
  • If a landlord serves an invalid counter notice, you are entitled to a lease extension on the terms of your claim notice.

Disadvantages of a statutory lease extension

  • Not all tenants qualify for a lease extension. The most common bar to claiming a statutory lease extension is that you must first have owned the flat for at least two years.
  • You are limited to what amendments you can make to the lease.
  • You are required to pay for your landlord's costs however the Act ensures that you are protected from being charged unreasonable amounts.
  • If you withdraw from the process after you have served a claim notice, you will remain liable for the landlord's costs (as well as your own).
  • The process is complicated and therefore it is easy for unrepresented tenants to make mistakes;
  • Although the strict timeframes keep the process moving, if a deadline under the Act is missed and your claim is not protected then your claim will lapse and you will have to wait twelve months before serving another claim.
  • This process may cost more and take longer than a voluntary lease extension because it is more complex.

Voluntary lease...

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