Lease Extension - Jonathan Lea Network

If you own a leasehold property, you will only own the right to live in the property for the period of the lease term, not the property or land itself. As the lease term diminishes, so does the value in your property and you will most likely at some point need to extend your lease.

There are two ways in which you can extend your lease; a voluntary lease extension or a statutory lease extension.

Voluntary Lease Extension

You can approach your freeholder to ask what their terms for a voluntary lease extension will be. There are no specific qualification criteria and it is up to your freeholder the lease term they would be willing to grant and the premium they require. With a voluntary lease extension the freeholder is at liberty to make changes to the terms of your existing lease. Although a voluntary arrangement costs less in terms of legal fees and is a shorter process, it is not always the best route and we would need to check the terms carefully and advise you.

Statutory Lease Extension

Under the Leasehold Reform, Housing and Urban Development Act 1993 (the Act), you can serve a Notice on your freeholder to purchase a lease extension of 90 years added to the remaining term and for the ground rent to be reduced to “a peppercorn” (nil). There are two qualifying criteria to pursue this route:

  • You must have been the registered owner of the flat for two years or more; and
  • The original lease must be a long lease, i.e. a term of at least 21 years

There are a number of stages to the statutory process as follows:


The first stage is to appoint a qualified surveyor who will inspect your flat and produce a valuation report to ascertain the price that should be entered into your Section 42 Notice of Claim. This price is referred to as the premium. You should appoint a valuer who is experienced in leasehold enfranchisement valuations and we will be happy to provide you with free of charge quotations if you wish.

Serving the Section 42 Notice of Claim

We will review the title documentation for your flat and prepare the Notice of Claim including the premium in the valuation. The Notice informs your freeholder that you are exercising your right to a statutory lease extension under the Act. We can include any required amendments to the lease, although under the Act, there are only very limited amendments that can be made and these relate to any defects or required modernisations.

The freeholder will have two months to respond to our Notice of Claim with his Counter Notice. During this time, they can request payment of a deposit equating to 10% of the premium proposed in your Notice of Claim and you should have funds available for the process is initiated.

If the freeholder does not serve a Counter Notice within the required time, then an application to Court can be made for an Order forcing the freeholder to grant the lease extension on the terms set out in your Notice of Claim.

Receiving the Freeholder’s Counter Notice

The freeholder will appoint their surveyor to inspect the flat so that they may produce their valuation and serve their Counter Notice, which will state which provisions of your Notice the freeholder accepts or rejects and for every provision rejected, the freeholder must make a counter proposal. It is usual that the freeholder’s counter proposal for the premium will be much higher than your proposal, but this gives the two valuers a starting point from which to negotiate. The premium that is eventually agreed between the parties will become the purchase price for the new lease.

Agreement of Terms or Application to the First-Tier Tribunal (FTT)

The terms of the lease and the premium which is to be paid have to be agreed within six months of the date of service of the freeholder’s Counter Notice. If terms are not agreed, then an application to the FTT must be made within this timescale to protect your Claim. It is very often the case that even if an application to the FTT is made, terms are still able to be agreed between the parties, but if this is not the case then the FTT will determine any outstanding terms themselves. Thankfully, it is very rare for matters to have to go all the way to an FTT determination.

Completion and Registration of the New Lease

Once the terms have been agreed, the parties have a four-month period within which to complete the lease extension. If either party is unable to do so, then an application to the County Court will need to be made in order to protect the lease extension claim from being deemed withdrawn.


A statutory lease extension can take between 6-9 months to complete but can take longer if an FTT determination is required.


The valuation carried out by a specialist surveyor can cost in the region of £500 – £900 plus VAT.

Legal costs are usually in the region of £1,750 – £2,150 plus VAT. However, if the matter does have to go to the FTT for determination, then legal fees can be in the region of £3,500 – £5,000 + VAT.

In addition to your own fees, you are liable to pay the freeholder’s valuation and legal fees, but not his fees in relation to any negotiations or any FTT matters. You should expect your freeholder’s legal fees to be similar to the above, although this depends on your freeholder’s choice of surveyor and solicitor.

In the unlikely event that Stamp Duty Land Tax is payable, we will advise you of the amount once the premium has been agreed.

If you have any questions or would like further advice on the above, then please call us on 01444 708 640 or email us at 

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