Lease Extension (“Formal” Route – serving a Notice)

Initial points to consider 

 1 The first point to consider is how long you have owned your flat.  As you may already be aware, it is a requirement of the Legislation that you should have owned the flat for at least two years. This means two years from when your name was registered at the Land Registry on your leasehold title, not the date of completion of your purchase. Assuming you do satisfy this point, you are able to serve a notice on your freeholder, unless you have served a previous notice and it has subsequently been “deemed” withdrawn in the last year.

 2 The first step would be to obtain a formal valuation report from a qualified valuer experienced in providing valuation advice under the Act of what they consider the premium should be for the lease to be extended because you will need to have some idea of your likely financial commitment. If you have yet to instruct a valuer, please let us know and we will give you details of a valuer who specialises in this type of report. They will be happy to give you a quote.

 3 We will need an up to date service charge or ground rent demand/receipt showing the Freeholder’s and/or their managing agent’s contact details. 

 4 We will also need to have a copy of your lease.  

Preparation of the Lease Extension Notice and serving of it on Landlord/ Freeholder

5 Once we have received your lease, we will have a better indication as to whether or not we need to amend any other terms of your lease, other than just the length of the same and the ground rent. We will then prepare the Lease Extension Notice and send it out to you to sign.   

 6 When serving your Lease Extension Notice, to counteract any problems with the landlord denying receipt, we will employ a process server to serve the notice on all addresses.

Landlord’s Counter-Notice

 7 After the Lease Extension Notice is served on the landlord, they will have two months to serve a counter-notice.  In the counter-notice the landlord can either reject your  Lease Extension Notice on the basis that it is legally invalid under the terms of the Legislation, or accept the notice but dispute the price, or accept the notice and the price.  The landlord may also dispute any variations to the lease that I may have requested.  In our experience, what usually happens is that the landlord accepts your Lease Extension Notice but rejects the price and any amendments to the lease which we may have requested.  At that point, the surveyors representing yourself (upon your instructions) and the landlord will be instructed to negotiate a sensible figure.

 8 The Legislation provides that the landlord can require you to provide a deposit at any time once your Notice has been served.  The amount of deposit shall be £250, or 10% of the amount proposed in your  Lease Extension Notice as payable on the grant of lease, whichever is the greater.  The Legislation also provides that the deposit must be paid within 14 days of the date that notice is given.  We will require the deposit funds from you if and when the landlord’s solicitors request this, so please be prepared to send the funds to us quickly.  (The Legislation provides for the landlord’s initial valuation fee and his reasonable legal fees to be paid for by you).

What if the surveyors cannot reach an agreement on the premium?

9 If the surveyors cannot agree a premium, an application will need to be made to the Leasehold Valuation Tribunal (LVT) to determine the price for a lease extension.  Although you are liable for certain legal costs and surveyor’s costs incurred by the landlord, the landlord is responsible for its own professional costs in responding to your application to the LVT. That being the case, it is usually the sensible view to make an early application to the LVT i.e. immediately upon being able to do so, which is two months after the date of the landlord’s counter notice.

10 Our experience has been that an experienced valuer will normally advise that if they cannot achieve the price they recommended would be accepted by the Tribunal, but believe they can achieve a figure slightly in excess of that, then they will advise you to go for the higher figure rather than incur the further fees involved in the Leasehold Valuation Tribunal hearing. 

Once agreement is reached

11 Once agreement has been reached, be it between the surveyors direct, or by the LVT, the new lease should prepared, agreed and then completed within two months of the date of agreement, failing which, application can be made to the court to compel the landlord to complete.  That application must be made no later than four months after the date of agreement, otherwise your claim will be “deemed withdrawn”. If this happens, you will need to wait for one year to pass from the date of withdrawal before you can serve another notice. Hence why it is important you appoint a qualified and experienced solicitor to monitor key deadlines throughout.

Timescale

12 It is by no means unusual for the total process to have taken up to 6-9 months. If it is your intention to sell your property at any time, we would ask you to please advise us at the first possible opportunity, as we may then be in a better position to overcome any problems that may arise as a consequence of such sale. We can also act on your behalf in the sale of your flat, making the whole process smoother and reducing the total number of professional advisors involved.

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