Have you owned and been registered as the owner of your flat for at least two years? If so, you are a potential qualifying leaseholder under the Leasehold Reform, Housing and Urban Development Act 1993 (“the 1993 Act”). The 1993 Act enables a qualifying leaseholder to serve a notice, known as a section 42 notice, on their landlord to acquire a lease extension. In return for a premium, the leaseholder will obtain a 90-year lease extension in addition to the unexpired term of the lease, and the ground rent will become a peppercorn (i.e. nil).
- In order to draft the section 42 notice, a solicitor will be required to work alongside a qualified and experienced surveyor who will carry out a specialist valuation for lease extension purposes, produce a comprehensive valuation report and advise on the premium to be inserted into the section 42 notice.
- Once a leaseholder has served the section 42 notice, the landlord has at least 2 months to serve a counter-notice that will most likely specify a higher premium than the leaseholder will end up paying for the lease extension.
- Negotiations between the landlord’s appointed surveyor and the leaseholder’s appointed surveyor commence and in most cases a mutually acceptable premium is reached.
- It is sometimes necessary to make a protective application to the tribunal to protect the section 42 notice. In most cases, a full hearing to determine the premium payable for the lease extension can be avoided.
- Once the premium is agreed, the form of lease, drafted by the landlord’s solicitor, is agreed and a completion date is set.
- The lease extension is completed and the new lease is registered.
This article is for general information purposes only and does not constitute legal or professional advice. It should not be used as a substitute for legal advice relating to your particular circumstances. Please note that the law may have changed since the date of this article.