It is important to consider extending your lease of your residential flat before the remaining lease term falls below 80 years as the premium payable for the lease extension significantly increases if there are 80 years or less remaining on the lease. It may also be difficult to secure a re-mortgage or sell the property if the remaining lease term falls below the 80 year deadline.
Initially, you may wish to contact your landlord direct and informally request a lease extension. The landlord may respond to this request with some proposed lease extension terms, possibly for a 90 year or 125 year extension. The landlord however, is not obliged to respond to an informal request and so success is dependent upon the landlord’s engagement.
Alternatively, under the Leasehold Reform, Housing and Urban Development Act 1993, a tenant has a right to acquire a new lease of a flat (also known as a ‘lease extension’) if the tenant has owned the lease for at least 2 years and the existing lease was granted for a term of at least 21 years.
If the above criteria are satisfied, the tenant is entitled to request a new lease for a term equal to the unexpired term of the existing lease plus an extra 90 years. The lease will otherwise be on the same terms as the existing lease save for the ground rent, which will be reduced to zero (also known as a ‘peppercorn’).
To initiate the statutory process, a formal notice must be served on the landlord requesting a new lease. The landlord then has a period of two months in which to respond to this notice with the landlord’s counter-proposals for the new lease. If the landlord fails to serve a counter-notice or does not engage, an application can be made to the First-tier Property Tribunal to seek assistance in this regard.
If you would like to discuss the possibility of extending your lease of a residential flat, please call 01206 700113 or email [email protected].