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Lease extensions for flats – the basics

If you own a leasehold flat, you’ll own the property for a fixed period of time. As the lease gets shorter it usually becomes more expensive to extend the lease and it can make your property harder to sell.

You can ask the landlord to extend the lease and negotiate terms like the length of the new lease and ground rent. But you might also qualify for the right to extend it. If you qualify:

• the lease is extended for an extra 90 years
• you won’t have to pay any more ground rent
• you can negotiate terms of the new lease – for example, changes to the lease or how much you want to pay to extend it
• you can appeal to the Leasehold Valuation Tribunal (LVT) if you can’t agree on any terms

The LVT is an independent legal body that can settle certain types of leasehold dispute without the need to go to court.

• Leasehold Valuation Tribunals - information from Ministry of Justice Opens new window

Qualifying for the right to extend the lease

To qualify, you need to meet certain conditions, including:

• you have held the lease for the last two years
• you hold a ‘long lease’, usually this means it was originally granted to last more than 21 years

If you bought your home though a shared ownership scheme, you must buy the remaining shares in it before you can buy the freehold

Exceptions

Even if you qualify, there are times when you can’t extend the lease. For example:

• in certain circumstances where the landlord is the National Trust or a charitable housing trust
• you have five years or less left on the lease and the landlord plans to redevelop your building
• you have a business lease

• Download 'Lease extensions for flats - getting started' (PDF, 200K) Opens new window

• Help with PDF files

• Shared ownership - how it works

How much does it cost?

You have to buy a lease extension from the landlord and you may have to negotiate the premium (price). Get a professional to work out the premium; it can be affected by things like the number of years left on the lease. If you want to add 90 years to a lease which has 60 years or more to run, use the link 'Lease extension calculator'.

If you and the landlord can’t agree on the premium, you can ask the LVT to settle the dispute.

You have to pay a deposit to secure the sale. This is either 10 percent of the premium or £250 (whichever is higher).

You usually have to pay the landlord’s legal costs for dealing with the sale, even if it falls through. You can appeal to the LVT if you think these costs are ‘unreasonable’.

• Lease extension calculator - for flats

• Leasehold Valuation Tribunals - information from Ministry of Justice Opens new window

Getting help and advice

Get a professional to help you extend the lease. They can also advise you on the benefits of extending it, check that you qualify and do the legal paperwork.

You can get free advice from the Leasehold Advisory Service or Citizens Advice.

• Find your local Citizens Advice Bureau

• Leasehold Advisory Service - online enquiry form

• Leasehold Advisory Service (LEASE)

Steps to extend the lease if you qualify

If you have qualified for the right to extend the lease, the basic steps are shown below. The steps are sometimes different, for example, if the landlord is ‘absent’ (can’t be found) or bankrupt. Download ‘Lease extensions for flats – getting started’ for more detail.

Step one – asking the landlord to extend the lease

Write to the landlord confirming certain information. For example:

• you qualify for the right to extend the lease
• how much you want to pay to extend the lease
• a date for the landlord to respond, they must have at least two months

This document is known as the ‘Tenant’s Notice’ or ‘Section 42 Notice’. Download ‘Lease extensions for flats – getting started’ for what this notice must contain.

Step two – the landlord’s response

The landlord’s response is known as a ‘Counter Notice’. The landlord can:

• accept your offer
• suggest different terms – for example, the price
• ask for more information
• not respond
• challenge your right to extend the lease

If the landlord asks for more information, they must do this within 21 days of your notice. You then have 21 days to reply.

If the landlord doesn’t respond, you can ask the court for permission to extend the lease. You should do this within six months of the deadline you originally gave the landlord.

The landlord can sometimes challenge your right to extend the lease in the courts. For example, if a notice is invalid or they believe you don’t qualify.

Step three – agreeing the terms of the new lease

You may need to negotiate terms, for example, the premium and any changes to the new lease. If you can’t reach an agreement, you can ask the LVT to settle the dispute.

You must enter into the new lease within two months of the terms being agreed. If not, you can ask the court to settle the dispute.

• Download 'Lease extensions for flats - getting started' (PDF, 200K) Opens new window

• Help with PDF files